Cetera Financial Group’s private equity owner Genstar Capital has reinvested fresh capital into the broker/dealer network from two of its newest funds, Fund XI and Fund X, the companies announced Wednesday.
In June, WealthManagement.com first reported that Genstar was going to restructure its investment in Cetera, moving the investment out of its Fund VIII to another fund, providing some liquidity to investors and recapitalize the company.
Genstar will remain the majority shareholder in Cetera.
"This reinvestment from Genstar affirms Cetera's proven ability to create value," Cetera Holdings CEO Mike Durbin said in a statement. "Secular tailwinds and continued economic growth underpin confidence in Cetera's future. This continued partnership serves as the foundation for Cetera's next chapter of growth as Cetera fulfills its core mission of serving advisors and their clients."
Genstar first acquired a majority stake in Cetera in 2018. Since then, Cetera has grown from 7,000 advisors and $242 billion of assets under administration to 9,000 advisors and $374 billion of AUA currently.
Cetera recently announced plans to acquire Avantax, the $84 billion, tax-focused wealth management firm formerly known as Blucora, in an all-cash deal for $1.2 billion.
Following that announcement, two ratings agencies said they are reviewing Cetera’s credit ratings for a possible downgrade, citing concerns that the acquisition could weaken the company’s financial profile.
In August, the firm closed on its acquisition of Securian Financial, with more than 91% retention of financial professionals in the transition. The advisors joining represented about $50 billion in client assets, the largest deal in Cetera’s history.
WealthManagement.com recently reported that Tom Halloran, who led the independent financial planning channel of Voya Financial Advisors, acquired by Cetera in 2021, will take over as the head of Cetera Advisors, the company’s traditional independent advisor broker/dealer. He replaces Brett Harrison, current president and CEO of Cetera Advisors, who will exit the company after 25 years.
The transaction is expected to close in the fourth quarter.