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SageView’s Aquiline Deal Could Fuel Firm’s Wealth Management Growth

The retirement-focused RIA's partnership with a PE firm follows a similar deal between Captrust Financial Advisors and GTCR last June.

SageView Advisory Group, a retirement-focused RIA with nearly $119 billion in assets under advisement, has a new stakeholder in Aquiline Capital Management, a New York–based private equity investment firm. 

The new deal could benefit both SageView and Aquiline as they further their expansion in the retirement plan and wealth management spaces, according to Mark Bruno, a managing director at Echelon Partners, who compared the deal with PE firm GTCR’s acquisition of a 25% stake in Captrust Financial Advisors that was reported last June.

“It really sets SageView up as a platform for Aquiline to go out and be very aggressive in their approach,” he said.

Aquiline reportedly purchased 80% of SageView’s total equity, with 20% remaining for SageView internal management, according to PlanAdviser. Both Randy Long, SageView’s founder and managing principal, and Jon Upham, principal for the company, will remain onboard and in command, according to SageView. The company was founded in 1989 and advises on 401(k), 403(b), 457, and defined benefit and deferred compensation plans. It’s based in Newport Beach, Calif., with more than 100 employees spread throughout 25 offices in 17 states. 

In touting the deal, Long said Aquiline’s investment would help the company grow in both the institutional retirement and wealth management spaces and boost ownership among advisors at the firm (according to SageView, “a large number” of SageView employees will become equity holders as a result of the deal).

“We have created a unique culture that is of great value to us, which made Aquiline the right choice for a capital partner,” Long said. “Aquiline shares in our vision for the future and is committed to independence, our people and technology.”

Jeffries served as SageView’s exclusive financial advisor during the deal, with Burr Forman onboard as legal counsel, with Ardea Partners and Willkie Farr & Gallagher serving as executive financial advisor and legal counsel to Aquiline, respectively (Wise Rhino also advised the PE firm in the deal).

The deal underlies the continued move toward combining wealth management and retirement plan services, and Jeff Greenberg, Aquiline’s chairman and CEO, said the company’s ownership in SageView was based on its status as a premier retirement-focused RIA in a consolidating industry.

“We see a substantial opportunity for SageView to serve its clients as wealth management and retirement services converge, and to expand its financial wellness offering,” he said.

Bruno said firms like SageView have built large retirement plan advice businesses, and have sought to improve the tight margins inherent to that space by centralizing their investments and technology.

Nevertheless, aggregator firms like SageView have not been able to expand the margins equal to what could be achieved in wealth management. Bruno said the pursuit of margin expansion has led some retirement plan firms to acquire wealth management businesses that can be integrated with their existing business. By doing so, they boost margins in the short term with an opportunity to grow the wealth management business over the long term.

“The profits or margins may not be that significant on a retirement plan account or client, but you do have access to hundreds if not thousands of individuals as participants, and if those participants can be converted to wealth management on some level, there’s a major opportunity,” he said. “You just need to have the structure, resources and services to take advantage of your reach and turn that into material business.”

Bruno also noted that Aquiline could use the new partnership with SageView to make a more specific play in both the retirement and wealth management space, while their experience would offer a benefit to SageView extending beyond the capital they provided.

“They really know the wealth management space very, very well,” he said. “When you’re doing acquisitions, it isn’t always just about having the right capital. It’s about having relationships and acumen, and also having the ability to see where the business is going.”

Bruno also said it was unlikely there’d be a large amount of deals similar to SageView’s partnership with Aquiline, or Captrust’s deal with GTCR, partially because there are not many firms occupying the position those companies hold.

“It could be a few, and that would be significant,” he said.

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