Raleigh, N.C.–based Captrust Financial Advisors announced its third deal this year, acquiring Sacramento, Calif.–based Genovese Burford & Brothers Wealth & Retirement Plan Management, a registered investment advisor with $3.13 billion in assets under advisement. The acquisition brings Captrust some scale in the Northern California area, and continues its strategy of combining retirement plan services with wealth planning.
“It gets us into a good market like Sacramento and does it with some scale,” said Rush Benton, senior director of strategic growth at Captrust. “The bulk of [GBB’s] business is wealth management, but with the retirement plan expertise that they have on our platform now and with the resources that we have, we feel that’s a tremendous growth opportunity for them. That plays well into our strategy of having both sides of the business in each location. The natural growth of wealth management clients coming from the retirement plan side is a real catalyst for growth.”
GBB, which has 36 employees, including 17 client-facing advisors, is the 46th firm to join Captrust since 2006. GBB was founded in 1987 by Mike Genovese and Lon Burford, and it’s now led by CEO Alex Brown and Partner Kelly Brothers, a known television and radio personality in the Sacramento area.
The news follows Captrust’s acquisition of MRA Associates in early January, a Phoenix-based RIA with $3.29 billion in assets under management, which allows Captrust to offer income and estate tax compliance and consulting services for the first time. According to DeVoe & Company, Captrust completed five deals in 2020, compared to seven deals in 2019 and four in 2018.
In June, Captrust sold a 25% stake in the firm to Chicago-based private equity investor GTCR, a deal that valued the RIA aggregator at $1.25 billion.
“Captrust’s momentum is accelerating in RIA space,” said David DeVoe, founder of DeVoe & Co. “Not only is the company executing a greater number of deals, they are acquiring strong, attractive firms.”
Captrust serves as a consultant to retirement plans that encompass 3.5 million participants.
“We kind of feel like we’re building a little bit of a backdoor brand into those participants,” Benton said. “Increasingly as those participants in those plans retire or seek financial advice, they’re able to find it with Captrust because we’ve built a number of different ways for them to access our wealth management expertise. So it’s a very symbiotic relationship between the retirement plan side of the business and the wealth management side.”
When Captrust buys an RIA, that firm comes under Captrust’s branding, and team members become employees. Captrust provides all the compliance, human resources, technology and accounting.
“We’re just a bigger version of the firms that we’re buying,” Benton said. “We think there are a lot of advantages to that because when you’re one company, you really can build some scale and efficiencies, whereas if you’re just a collection of still independently operated companies—each having to do their own compliance, have their own technology and all those things—that’s a different model, doesn’t create the quite the scale that we’re able to create.”