Raymond James Financial has reached an agreement to purchase Silver Lane Advisors, a boutique investment bank that specializes in mergers and acquisitions involving financial services firms, including wealth managers.
New York-based Silver Lane Advisors will keep its name and form a new Asset & Wealth Management group within Raymond James Investment Banking's financial services practice. The group will have more than 40 bankers covering banks and thrifts, asset and wealth managers, insurance companies, specialty finance companies and business development companies when the transaction is complete.
Elizabeth Nesvold, managing partner and founder of Silver Lane, will become the head of the asset and wealth management group. Her husband, Peter Nesvold, a managing director and the head of strategy at Silver Lane, will be the chief financial officer of the new group. The boutique bank’s general counsel and head of operations, Jim Collins, will also remain with the group as well as all the other employees.
The boutique will also stay in its new office overlooking Central Park that it moved into last year, where some investment bankers from Raymond James will join them.
Terms of the deal were not disclosed, although Raymond James, a publicly traded company, could file a Form 8-K with the Securities and Exchange Commission detailing the acquisition. The deal is expected to close in April.
Raymond James’ investment bank includes about 400 bankers focused on mergers and acquisitions and capital raising for public and private companies across sectors. It has been focused on expanding the financial services practice for some time, Paul Reilly, Raymond James' chairman and CEO, said in a note about the Silver Lane acquisition.
“Consistent with our long-term view of consolidation across the financial services space, we see particular opportunity in the asset management and wealth management categories, which is where Silver Lane excels with unparalleled expertise,” said Jim Bunn, president of Raymond James global equities and investment banking. “Integrating their deeply experienced professionals into our existing financial services practice further positions us to capitalize on the growing demand for asset and wealth management expertise, while offering clients a broader range of capabilities.”
Silver Lane not only adds deal experience and expertise in a specific segment but it’s also “very complementary” to the existing financial services practice, Bunn said, as wealth managers increasingly pique the interest of banks looking to acquire them. A recent report by Echelon Partners, a Los Angeles-based investment bank and consulting firm focused on wealth and investment managers, showed the number of banks acquiring registered investment advisors continuing to tick upward.
Those banks, as well as asset managers, are not limited to those in the United States.
Burn said large money managers increasingly consider themselves global businesses and that there is “a lot of across-the-board opportunity, especially between the U.S. and U.K., in wealth and asset management.”
Before the deal with Raymond James, Silver Lane had no physical presence in Europe, but Bunn said the investment bank would likely hire some London-based investment bankers to work with the new group.
In addition to an extended geographic reach, Silver Lane will also benefit from being able to work on more deals with greater complexity, offer debt refinancing and more M&A restructuring, all without significant changes to the boutique's day-to-day operations, said Peter Nesvold.
Silver Lane was not actively looking to partner with another investment bank, but others had expressed interest in acquiring it in the past, Peter Nesvold said. Although Raymond James’ investment bank is a large one, it has a good history of working with boutique firms and was a cultural fit for Silver Lane, he said.
“I think that is the interesting story line. Here we have a very major bank that sees [asset and wealth management] as something likely to continue, if not get more active,” Peter Nesvold said. “That tells you the trend toward asset and wealth management is one that is likely to continue.
But Silver Lane isn’t abandoning the types of clients that made the business a success. The deal with Raymond James “increases the ceiling without really changing the floor,” Peter Nesvold said.
Silver Lane Advisors, founded in 2007, is one of the top-ranked firms that specializes in deals involving wealth and asset managers. In September, Elizabeth Nesvold, the investment bank’s founder and managing partner, said the company employed 15 bankers and primarily worked on deals valued from $20 million to over $1 billion. The firm's five managing directors have worked on a total of more than 300 deals themselves.
Among those, the bank was the exclusive advisor to Emigrant Bank in 2018 in the divestiture of its majority interest in HPM Partners, a New York-based investment and wealth management firm with more than $9 billion in assets under management, to private equity firm Lightyear Capital.
In November, Silver Lane advised Citizens Financial Group on an agreement to purchase Clarfeld Financial Advisors, a wealth manager and multifamily office with $6.6 billion in assets.
It was also the exclusive advisor to Traust Sollus Wealth Management, a registered investment advisor managing about $410 million, on its sale to Mercer Advisors, another RIA with over $12 billion in assets.