Beacon Pointe Advisors, a Southern California-based registered investment advisory firm overseeing more than $30 billion in assets, announced two more acquisitions on the heels of its first deal with a wirehouse breakaway team, announced earlier this week.
The eponymous Reed Finney team joins Beacon Pointe from Bleakley Financial Group, where Finney spent nearly four decades and was a partner for more than three. Now a partner and managing director at Beacon Pointe, he brought with him a team of seven and around $700 million in managed assets, establishing the RIA’s third office in the tri-state area.
Finney left Bleakley on good terms.
“Finney was an amicable breakaway from an RIA,” said Beacon Pointe President Matt Cooper. “He simply felt he would be happier in a different environment, and they agreed which clients were Reed’s and no harm, no foul.”
“I decided that it would be a good time for me to see what else was out there to really take care of my clients,” Finney explained. “And the other thing I really wanted to do was to find a good fit for my team, see if there was a better career path for them. That’s one of the things I really liked about Beacon Pointe in doing my due diligence—it’s really a family-oriented place and they really have a great career path.”
Beacon Pointe worked with the Finney team to find and build a new office space in Roseland, N.J., where they will work closely with teams in the New York City and Summit, N.J., offices as part of one of many regional sub-platforms the firm is working to create nationwide.
Finney said virtually 100% of his clients came with him and have been supportive through the move. Most had already been on the Charles Schwab custodial platform and didn’t require any repapering or new account numbers.
“The platform really offers a lot for them in terms of legacy planning, and the institutional investment platform is great. I think the CIO Michael Dow and his whole team have done a great job in terms of what they offer clients,” he said. “They’ve even congratulated me, which I thought was surprising because I’m really doing this for them.”
Finney was introduced to Beacon Pointe by Alaris Acquisitions, which typically supports wealth management M&A transactions on the buyer side, according to the firm’s website.
Separately, Private Capital Management, an RIA in Larkspur, Calif., has merged into Beacon Pointe, with some $200 million in managed assets. The father-daughter team of Joe and Summer Ramos cited the fact that Beacon Pointe is the largest female-led RIA in the nation and has twice as many women advisors than the industry average as a key selling point.
“Partnering with Beacon Pointe was a natural choice for us,” said Joe Ramos, former PCM principal and new Beacon Pointe managing director. “We knew we needed additional support, expertise, and access to institutional-grade investments to continue our growth. Beacon Pointe's commitment to women, led by CEO Shannon Eusey, was particularly refreshing, given that over half our clients are successful women.”
“They're affiliating with our Bay Area hub down in Campbell, so this is really strategic because Marin County is at the northernmost tip of the Bay Area,” Cooper said. “And Campbell is down by San Jose, so it kind gives us this polarity. They're going to coordinate and find synergies and scale by combining their P&Ls and working together to drive business in the Bay Area.”
Cooper also said Summer Ramos brings experience in, and a passion for, ESG investing, which is an area of focus for Beacon Pointe.
“She helps us in that regard in an area of the country where the clients tend to have maybe a little more bias that way,” he said. “Which is great.”
“PCM’s growth trajectory has been very impressive,” said Don Schipf, director at Park Sutton Advisors, the investment bank that represented PCM in the transaction. “They’ve built a great business and it’s not unlike the story of many other smaller RIAs where it's time to partner up with a firm that can help them take it to the next level. The resources at Beacon Pointe are definitely going to help them do that.”
The deal brings Beacon Pointe to around $2 billion in Bay Area assets.
Backed by private equity firm KKR, Beacon Pointe “insists” on sharing equity in all acquisitions.
“For alignment purposes and because we're looking for people who honestly believe that the next five to 10 years for them are going to be bigger and more exciting, both personally and professionally,” said Cooper. “So yeah, equity always.”
He said principal owners of acquired firms can roll equity into Beacon Pointe through a tax-free exchange, and others have an opportunity to take equity at close. But another program, provided through KKR, also allows upside participation for employees who aren’t equity owners.
“One of the reasons we really liked KKR when we chose our private equity partner was this general equity pool that KKR set aside out of their upside that says at the next recap or the next liquidity event for Beacon Pointe, everybody in the firm that doesn't yet own equity will participate and receive a cash check at the next liquidity event,” he said.
With nearly 500 employees nationwide, 50 offices and more than $30 billion in assets, Beacon Pointe expects to continue focusing on acquisitions, typically self-sourced, of practices with good people, complementary cultures and attractive capabilities that are focused on financial planning. The firm will also continue developing regional sub-platforms in major market areas like San Francisco and New York City, as well as Chicago and parts of Texas.