Longtime Boston wealth manager Anchor Capital Advisors has bought back the majority stake of itself from the private bank across the street.
In 2006, the advisory firm sold 80 percent of its equity to Boston Private. At the time, Anchor Capital Advisors was seeking liquidity for its initial seed investors, founders and principals, and the private bank was looking to diversify its business, according to Anchor Capital Advisors CEO Bill Rice Jr. Employees owned the remaining 20 percent of the firm.
The firm now oversees $9 billion in client assets and the time was right for both companies to part ways, according to Rice. He said Boston Private wanted to focus on its core businesses and he thought it was in the best interest of Anchor Capital Advisors employees to own the advisory firm again.
“There is no better motivator than having ownership in one’s own firm,” Rice said.
Boston Private deferred all questions about the sale to Anchor Capital Advisors. Details of the transaction were not disclosed and the sale is expected to close in the first quarter of 2018.
Employees of Anchor Capital Advisors now own 70 percent of the business and Lincoln Peak Capital, a long-term equity partner for asset management firms, owns the remaining 30 percent.
The partnership with Lincoln Peak Capital was partly out of necessity, according to Rice. The employees would not have been able to make the purchase alone under favorable terms for all parties. Rice added he thought there ended up being a good balance between all the businesses in the end. Maintaining the majority of equity in the deal was important to Anchor Capital, so that the ownership stake served as a motivator to key employees. Rice said Lincoln Peak Capital is also a partner that brings valuable expertise in the space.
“They are a great partner,” Rice said. “Having been in the industry a long time, they have insight into a lot of different ways we might be able to grow and add value.”
The sale is only one of several other recent changes at Anchor Capital Advisors. Rice has taken over the role of CEO from his father, who founded the advisory firm in 1983 and will remain active in the company as executive chairman. Rice will also continue in his current role as CIO and Mark Bergen, the COO of Anchor Capital Advisors, will assume the role of president.
Because it has been around awhile, Rice said the business periodically takes a step back and looks in the mirror, in a hunt for ways to optimize and improve itself. Until recently, he said, it had never made a concerted effort to holistically market itself and decided it needed to overhaul its website, begin publishing opinion papers and use social media. The company also made significant updates to its technology, such as adopting FactSet solutions for investment managers.
Anchor Capital Advisors doesn’t plan on making any changes to their strategies. “We are a value manager, first and foremost and our real expertise as a firm is in small and mid-cap securities,” Rice said.