The Pritzker Organization, the private investment firm for one of the wealthiest families in the U.S. and heirs to the Hyatt Hotel fortune, took a minority stake in Steward Partners, an employee-owned wealth management firm associated with Raymond James Financial Services. The purchase comes with two seats on Steward Partners’ board of directors, according to a news release.
Steward’s growth path appealed to The Pritzker Organization, which had been looking to opportunities to invest in the wealth management industry for several years, said Pritzker’s principal Jason Sussman.
For Steward, the investment comes without the pressures from investors looking for quick returns. “The Pritzker family's ‘buy to build’ strategy is the opposite of the typical private equity ‘buy to sell’ mentality. Their permanent capital base gives The Pritzker Organization the ability to invest for long-term appreciation,” said Jim Gold, CEO of Steward Partners.
According to Hy Saporta, president of Steward Partners, the firm plans to use the additional capital to continue its expansion into more markets. Since Steward Partners was founded in 2013, it has amassed $23 billion in client assets and gown its advisor base to 170 financial advisors across 27 offices, mostly on the East Coast. In April, the firm completed its acquisition of Umpqua Bank’s wealth management business, Umpqua Investments, which not only helped it enter the West Coast market but also gave it $3.4 billion in assets, an additional $15 million in revenue and 23 financial advisors.
Gold added in his statement that Steward Partners has been “very selective” in choosing outside investors. “We want to make sure that our goals and long-term vision are in alignment,” he said.
That discernment also led executives to an earlier investor, The Cynosure Group, a Salt Lake City–based private equity firm. Steward Partners sold a piece of its firm to Cynosure Group in 2019. That event brought on Herbert “Bud” Scruggs, managing director and co-founder of the Cynosure Group, and Keith Taylor, another managing director, to its board of directors.
Steward’s board additionally includes former private equity managing director and co-founder of Pine Brook Partners Michael McMahon and Rob Jackowitz, chief financial officer of Declaration Partners, an investment firm backed by the family office of The Carlyle Group co-founder David Rubenstein.
Raymond James provides custodial services to Steward Partners, but it won't be the only one for long. A spokesperson said the firm plans to provide more custodial options to advisors sometime this year.
Goldman Sachs acted as financial advisor to Steward Partners while The Pritzker Organization received financial counsel from Scott Roulston.