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Private Equity in Wealth Management: Bain

The structured dealmaker.

Founded in 1984 by a group including former presidential candidate Mitt Romney (the firm’s only CEO before departing in 1999 to enter politics), Bain Capital manages approximately $175 billion across a dozen investment funds. Its venture, technology, private equity, special situations and various credit funds can all provide capital to the financial services sector. 

Recent investments in Carson Wealth and CI Private Wealth (now Corient) were made out of the special situations fund and represent structured partnership approaches to the independent wealth management space. (Another investment in an Indian wealth management business came out of the firm’s private equity funds.) For instance, the Carson deal has been described as a structured growth equity investment made alongside founder Ron Carson, and the CI deal more closely resembles a convertible preferred equity investment, according to at least two observers.

The acquisition of 20% of CI Financial’s U.S. wealth management platform for $1 billion was completed by a consortium of investors, including Abu Dhabi Investment Authority, Flexpoint Ford, Ares Management Corp. and the state of Wisconsin.

“In special situations, we focus on creating partnerships with other shareholders in the businesses that we invest in,” said Bain Capital Partner Cristian Jitianu. “Sometimes those shareholders are founders or families, or corporate if we invest in a division of a larger company. Or they can be other institutional investors, such as private equity funds or other types of shareholders and asset owners.

“We invest in firms needing growth capital and looking for a partner that can help them achieve the next milestone and maximize their potential faster,” he said. “We’ve set up our special situations business to have the ability to add value to every situation through our operating partners platform, as well as by having a lot of investors on our teams who are very deep in each sector and can come to each management team with a point of view around how to create value and accelerate their growth journey.”

Bain Capital isn’t choosing investments based on the size or age of target firms, the advisor affiliation model, or a particular growth strategy. The firm looks to invest in RIAs with proven management teams and tightly integrated business models. 

“The integration model sets itself up to create differentiation for the business as a whole, and allows it to grow faster organically, be more profitable and provide a better client experience, better products and services, and makes the advisors more efficient,” Jitianu said.

“Integration combined with M&A is a virtuous cycle,” he explained. “It makes the platform more attractive for other advisors to affiliate with it, which creates more scale, which again allows more investments into things like technology and client experience. That creates a flywheel, which we think leads to fundamental advantage.

“While we have so far invested in RIAs, that’s not to say that we don’t like the broker/dealer space, which has attractive elements as well,” Jitianu said. “It’s just that over the last several years we have found the opportunity to be more attractive in RIAs, but much of that has been due to the specific transactions which have come to market. The valuations and structure of those transactions have been a better fit for us.”

Bain Capital’s special situation fund looks for opportunities to invest more than its minimum amount of between $50 million to $75 million in potential partnerships. The fund has no mandate to make a majority investment, but will occasionally buy 100% of a business, as well as provide capital in ways that provide fixed returns with some equity participation. The “vast majority” of deals have some sort of downside protection for investors, said Jitianu, but not all.

“The way we structure our transactions is very bespoke for each situation depending on what other shareholders are trying to optimize for,” he said. Investments that have significant upside potential in common equity, for instance, may not require downside protections, but then might command a lower multiple to ensure adequate returns.

“Having structure and some downside protection allows us to lean further into the valuation.”


With billions of dollars invested, PE firms are driving the industry's rapid consolidation. Here are some of the most active participants:

Thomas H. Lee Partners - The Active Operators

Lightyear Capital - The Domain Experts

HGGC - The Co-Investor

Genstar - The Majority Partner

Stone Point Capital - More Opportunities Than Capital

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