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AMG Wealth Partners Takes Majority Stake in Veritable

Last year global asset manager Affiliated Managers Group Inc. launched a new subsidiary with the aim of acquiring equity in top boutique investment management firms. Today the company said it is taking a majority stake in its first business: Veritable LP, one of the largest RIAs in the country with assets of $10 billion.

John W. Copeland III, president of the subsidiary, AMG Wealth Partners, said all the top managers at Veritable would retain significant equity interest in their company and continue to manage it over the long term. Today’s decision provides the Veritable managers with a succession plan, he said; Veritable was founded in 1986 by Chief Executive Officer Michael Stolper.

“Veritable is a terrific boutique firm with a unique culture, a unique way of servicing clients, and an impressive history. And we want none of that to change,” Copeland told Registered Rep. today. “I think a big part of this transaction for Veritable is to ensure the firm remains, forever, what it is today—an independently managed boutique business, with management having significant equity in the business.”

Veritable partner Jonathan Scott declined comment and referred questions to AMG. Copeland said the Veritable team was busy with clients today. Terms of the deal were not disclosed. The deal is expected to close June 30.

Veritable has nearly 200 ultra-high-net-worth client families. Its broad service model disdains proprietary investment products and includes attention to tax planning. Based in Newton Square, Pa., the firm employs 84, including 36 investment advisors and 12 researchers.

Dan Inveen, principal of FA Insight, a Tacoma, Wash. consultancy, says Veritable’s size makes it a prize.

“$10 billion in assets, that rivals the size of some of your smaller RIA custodians. It’s right in the range of some of your leading TAMP platforms,” Inveen says. “A $10 billion firm is probably worth upwards of $100 million-plus in value. It appears they’ve got a limited number of owners. So these are folks with extremely concentrated positions in a very valuable enterprise.”

Publicly-held Affiliated Managers Group has $338 billion in assets under management over a broad group of affiliates. Last summer Copeland was recruited from Morgan Stanley to lead AMG Wealth Partners; he had been senior partner at Morgan. He reports to Affiliated Managers Group Chairman and CEO Sean Healey.

“In terms of their initial acquisition, they’ve made a bold statement about what they can do,” Inveen says. “There’s only so many of these big marquee firms. A lot of them already have some kind of parent or affiliate-type ownership.”

AMG sees significant growth in the high-net-worth investor population in the years to come and wants to position itself to take advantage of that trend. Copeland said AMG is looking for firms, by and large RIAs, with strong depth of service and a good bench of managers.

“I think there’s a lot of opportunity out there. There’s a lot of very high-quality firms and the demographics would argue that a lot of those firms at some point would be looking for tools that help them think about things like succession planning,” he said.

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