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MAI Launches Retirement Unit With West Point Deal

With Florida acquisition, MAI Capital Management breaks into the retirement plan space, part of strategy to more than triple AUM over next four years; the firm also announced addition of Florida-based $140M AUM advisor.

MAI Capital Management, a rapidly growing integrator of registered investment advisors specializing in financial planning for high-net-worth individuals, said on Tuesday it was acquiring the West Point Business Group in Ponte Vedra Beach, Fla.

The new firm adds a specialized retirement plan consulting business to the MAI platform and will, executives say, help kick-start the launch of MAI Retirement, the firm’s new division dedicated to retirement plans.

“It was a big initiative for us this year to find a great platform that we could help to expand and also give a capability to our clients that we otherwise weren’t really able to fully offer,” said MAI Managing Partner Rick Buoncore. “So now we have a great platform with two gentlemen that were serving our country in the Army.”

The transaction, which added around $230 million in AUM and $568 in retirement plan assets under advisement to the MAI platform, closed on Sept. 30. Terms were undisclosed, but Buoncore said equity plays a big role in MAI acquisitions, often representing as much as 50% of the overall deal.

Founded by alums of the eponymous military academy in upstate New York, West Point provides fiduciary-based retirement plan consulting and financial wellness programs for businesses, as well as wealth management services for individuals and families. The Florida firm will establish MAI’s defined contribution and benefit plan business to provide 401(k) services to a network of partners and affiliates, according to the firm.

West Point partners C. Clayton Perry and Keola J. Elobt will both become managing directors and group heads of MAI Retirement and will be joined by four other team members. MAI has appointed Jason Hamilton to direct the new division.

Additionally, MAI's executives on Wednesday said they had recruited J.D. Loden, a financial advisor and principal of J.D. Loden Wealth Management, to its Naples, Fla., office. Loden focuses on high-net-worth clients and brings $140 million in AUM to MAI. He will take the title of senior wealth advisor and managing director.

Based in Cleveland, MAI has been actively pursuing strategic growth—organic and inorganic—since it was acquired by Galway Holdings last summer. The acquisition gave the firm access to private equity capital and Galway subsidiary Epic Brokers & Consultants, which MAI is using to acquire clients and provide more services to them.

“Epic has a tremendous employee benefit business and a need for a 401(k) solution because a lot of their clients have been asking for it. One of the reasons that it became such an important priority for us is because it fits with one of our sister companies and will help us grow,” said Buoncore, adding that the complementary business model also provides a nice acquisition pipeline for its wealth management arm as individuals exiting retirement plans will have an existing relationship with MAI when in need of advice.

"The value created pairing up retirement consulting and wealth management has been one of the strongest undercurrents in our M&A work over the last four years," said Rob Madore, director of M&A advisory for Wise Rhino Group, a South Carolina–based consulting firm focused on the retirement and wealth management sectors. Wise Rhino Group has been instrumental in facilitating a number of high-profile retirement and wealth mergers in recent years. 

"Traditionally, this convergence has started on the retirement consulting side and bridged to wealth, with large, untapped growth opportunity within the executives and employees of retirement plans," he said. "There is equally massive opportunity for firms to invert that process, embedding true retirement capabilities within an already scaled wealth management enterprise. As you see here with MAI and a few notable others the past few months, more firms are looking to take advantage of these synergies and we expect this to become more of a trend moving forward."

With a little less than $15 billion in assets under management currently, MAI has plans to grow to $50 billion over the next three to four years, said Buoncore. In addition to a legacy sports division, the wealth management division, an insurance arm, a family office and, now, a retirement unit, the firm is looking at adding trust capabilities next.

The trust piece is taking longer because it has been difficult to find an existing trust company willing to be an exclusive partner, but there are “a couple that we are looking at,” said Buoncore, who hopes to announce something in the next few months.

“I hope so. That’s the one piece that I think is still missing,” he said. “We always have the option to build it organically but would certainly prefer to have something that is a preexisting platform.”

As MAI continues to build out new and existing businesses expected to cross-pollinate organic growth, the firm is also pursuing growth opportunities with an eye to co-locating in areas where Epic has existing retail offices, and leveraging their specialties and client rosters.

The firm currently has around 13 firms in its M&A pipeline, according to Buoncore, and is looking to buy around 25 million in EBITDA annually in regions where Epic has a significant presence, including California, Texas, Indiana and New Jersey.

“The key is finding the right people with the right structure,” he said. “You don’t want to find somebody so big that, even though you know you’re going to grow, it’s not going to be meaningful. And you don’t want somebody so small that the growth will overwhelm them.”

West Point is MAI’s 10th acquisition since the Galway acquisition, and its fifth this year. The firm currently has 13 locations in seven U.S. states and around $14.7 billion in assets under management.


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