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Homrich Berg President Thomas Carroll
Homrich Berg President Thomas Carroll will take over as CEO on Jan. 1.

RIA Homrich Berg Secures $75M in Debt Financing

The deal allows $13 billion Homrich Berg to maintain majority control of the firm and fund future M&A.

Atlanta-based RIA integrator Homrich Berg, which has about 50 client-facing advisors and manages more than $13 billion in client assets, has completed a debt capital revolver, raising $75 million through a multi-bank syndication led by First Citizens Bank.

The deal allowed Homrich Berg to maintain majority control of the firm; in July, the RIA sold a minority stake to New Mountain Strategic Equity, an affiliate of private equity firm New Mountain Capital, to facilitate ownership succession.

The new funds will be used to ramp up mergers and acquisitions, said Homrich Berg President Thomas Carroll. The firm just closed on its largest deal yet, acquiring Oakbridge Partners, a $1.5 billion RIA in Buckhead, a neighborhood in Atlanta.

“There are still many innings left in this consolidation trend, with business owners trying to find succession plans and needing to partner with a larger firm like Homrich Berg,” Carroll said. “Or, in the case of Oakbridge, you had a great business with some younger business owners, but they just got to the point where they were bucking up against scale and capacity challenges, and rather than going and doing it on their own, they decided to effectively merge with Homrich Berg. That trend is going to continue, so it creates a good opportunity for banks, quite frankly, to lend into the space.”

This is the first time in HB’s history that it has gone out to the banking market. Carroll said the firm could have gone to a private lender or raised private equity funds, but the cost of capital was cheaper this way.

“Clearly interest rates have gone up, and the cost of capital has risen as a result of that and will likely continue to rise, but it’s still, in the overall cap structure, the best form of capital for us at this stage of our growth to be taking,” he said.

The news does not mean that HB is going to become an aggregator of assets; rather, the firm has grown methodically over the past 30-plus years and will continue to take that more conservative approach, he added. The firm has averaged about one deal a year for the last five years, and this new financing may quicken that to two to three acquisitions a year.

Homrich Berg has been intentional about being a regional integrator of fee-only advisory firms, not an aggregator.

“We believe in one HB client service model; we believe in one HB investment philosophy and department; we believe in having one tech stack, one operations department. So our focus is to make sure that any target that would be interested in becoming part of Homrich Berg that they realize that we’re going to integrate their business into Homrich Berg,” Carroll said. “We see scale and benefits from taking that integrator approach, and we want to run a cohesive business and build it for the long term.”

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