Focus Financial, the publicly traded partnership of registered investment advisors, said that Spectrum Management Group, based in Indianapolis, has entered into an agreement to join the Focus partnership.
The transaction is expected to close in the first quarter of 2023.
Founded more than 25 years ago, Spectrum serves high-net-worth families and professionals predominantly in the Midwest. The firm uses a proprietary planning system, dubbed the LifeSpectrum Planning process.
"Partnering with Focus will provide us with the additional resources to enhance our value proposition while not altering the core principles and culture of the business we have built,” said Spectrum CIO Leslie Thompson, in a statement. “In our discussions with Focus over the years we have always been impressed by the consistency of their approach and the quality of partner firms they have invested in. When we decided to join with a strategic partner to facilitate the future growth of Spectrum, the transparency of the Focus model and our ability to retain control of our business resonated with us.”
"Spectrum embodies what we look for in a new partner firm," added Focus CEO Rudy Adolf. "They have an established market presence and a strong reputation, supported by a dynamic leadership group and an accomplished team of professionals. We are confident that our suite of business and client solutions will help them accelerate their growth and continue building their bench of talent."
Since launching in 2006, Focus has now done more than 250 deals—most of which were subacquisitions for existing partners. Including two deals this month, Focus has either closed or announced 26 deals so far in 2022—six new partners and 20 mergers. Spectrum will become the 89th partner firm on the platform.
Focus also announced a new $2 billion credit facility earlier this month in order to refinance its existing $1.6 billion first-lien term loan, and revolving credit line, due in 2024. The firm may raise additional debt capital for general corporate purposes, according to executives. Focus expects to close on the transaction in the fourth quarter of 2022 and reaffirmed its target of keeping a 3.5-to-4.5 times net-leverage ratio.
In 2021, the firm reported annual revenue of $1.8 billion. Adolf said late last year that he plans to reach $4 billion in revenue and 125 partner firms by 2025.