Chicago-based Segall Bryant & Hamill, a registered investment advisory with $12.4 billion in assets under management, plans to acquire Denver Investments, a Denver-based RIA with $7.3 billion in assets. The merger provides Denver Investments with greater scale and improved operational efficiencies, while it expands SBH’s wealth management footprint in the Colorado area.
“Having greater scale meant that we could be more efficient from an operations perspective, and that ultimately allows us to redeploy resources and invest in our business in ways that can further benefit our clients,” said Cindy Knowlton, head of distribution at Denver Investments. “They have a strong back-office. They have strong operational resources, and that was one thing that was attractive to us.”
Knowlton said the firm was also struck by their similar business models, being in the wealth management, institutional and mutual fund spaces, a rarity among RIAs. Approximately 32 percent of SBH’s assets are in wealth management, while 68 percent is institutional. About 20 percent of Denver Investments’ assets are in wealth management, versus 52 percent institutional. Having that mix of business can be beneficial to wealth management clients.
“For our wealth management clients, they have always benefitted from the institutional heritage here at our firm, and I imagine SBH’s clients have benefitted from the same, where you have deep institutional quality research and portfolio management that can be leveraged within the wealth management portfolios,” Knowlton said.
Both firms also have mutual fund platforms. Westcore Funds, advised by Denver Investments, will likely become part of the SBH mutual fund family after the acquisition closes.
Both firms use Schwab for custody of their wealth management assets and that will continue. SBH uses Advent for portfolio management and accounting and Denver will likely be shifting to that system over time.
Knowlton said the deal was not about aggregating assets.
“This acquisition wasn’t just about getting bigger,” she said. “This was about, how do we come together as a firm with the ability to offer our clients even more—from an investment solution perspective, from a deep talent perspective and from a scale and operational efficiency perspective?”
It has been an active week for RIA mergers and acquisitions. This week, Mercer Advisors acquired Austin, Texas-based Murray & Co. and Hartford, Conn.-based Pinnacle Investment Management, bringing its total client assets to $11.6 billion. Pittsburgh-based wealth management firm D.B. Root & Co. also acquired two financial advisory teams to build out its business in the retirement plan space.