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The senior leadership team at Concurrent Advisors

Merchant Buys Minority Stake in $12.2B Raymond James OSJ

The deal allows Concurrent Advisors, a super office of supervisory jurisdiction with Raymond James Financial Services, to create a custom capital solution for its underlying advisors.

Merchant Investment Management, a New York–based private partnership that provides growth capital and other support to independent financial services firms, has taken a minority, non-controlling interest in Concurrent Advisors, a super office of supervisory jurisdiction of Raymond James Financial Services. San Diego–based Concurrent supports 55 advisory teams and a total $12.2 billion in client assets, Merchant’s biggest deal to date.

The deal allows Concurrent to create a capital solutions offering for its underlying advisors, in which advisors sell a minority stake in their practice in exchange for cash proceeds and an equity stake in Concurrent. Advisors who opt in to that capital program then have access to working capital that they can use however they see fit, whether that’s for acquisitions and recruiting or investing back into their business.

“When we created this solution with Merchant, basically we came up with a standardized structure to take minority, non-controlling stakes in our underlying partner firms,” said Nate Lenz, a founding partner at Concurrent. “Through that structure, they take on an investment from Merchant and Concurrent; from there they still maintain full operational control.”

So far, 25 of Concurrent’s 55 teams have signed on to the capital program, and there are more interested.

“Where a Merchant or any other family office or private equity firm that might be investing in this space wouldn’t look at a $200 million practice, the fact that we’ve got 25 of them already participating and we’ve got a number of more that are lined up to participate does create the economic situation that does make it attractive,” Lenz said.

Merchant Managing Partner Tim Bello said the deal shows the flexibility of his firm’s capital structure.

“We can look bottom-up and top-down,” Bello said. “We can go into a company; we can in this case look at a holding company and say, ‘OK, we’re going to partner with the mothership through an equity injection, and then we’re going to furthermore collaborate with the operators to design in this case a customized capital solution that goes into these 25 other practices.’”

Merchant did something similar when it helped Parsippany, N.J.–based Summit Financial bring a new custom capital model to its advisors through the launch of Summit Growth Partners.

“We’re trying to create more alignment between the fiercely independent advisory practices and the mothership platform, where prior there was minimal alignment or none,” Rick D’Amico, founding partner of Merchant, said. “And post, you really feel like everybody’s rowing in the same boat.”

But Merchant is not just providing capital; the firm will also partner with these underlying businesses to help with the underwriting, sourcing and structuring of transactions.


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