United Capital Financial Partners (UCFP) today said it has closed on three new RIA acquisitions with combined assets under management of about $2.2 billion, further boosting the firm’s presence in an M&A market that’s growing increasingly competitive. United Chief Executive Officer Joseph J. Duran said the three acquisitions —Zirkin-Cutler Investments Inc., with $1.6 billion in AUM in Bethesda, Md.; and MarketSpace Financial in Albuquerque, N.M., and Sovereign Wealth Management in Memphis, Tenn., with combined AUM of about $600 million—closed on Dec. 31. “It was a very busy New Year’s,” Duran said.
The three deals bring United Capital’s total AUM to more than $13 billion, with 29 offices across the country. The firm, based in Newport Beach, Calif., has been growing aggressively since its founding by Duran and others in 2005. The company did six deals last year, including the three it announced today, Duran said. Zirkin-Cutler is United’s largest deal by AUM so far. It was acquired from Buffalo-based M&T Bank for cash and notes, Duran said; terms were not disclosed, but principals at Zirkin-Cutler received equity in UCFP. The fee-based firm serves more than 300 clients, chiefly families in the Washington, D.C., area with assets of $1 million to $10 million, and also some institutions.
“Capturing a big one like that is certainly a big success for them. I’m sure Focus [Financial Partners] or HighTower [Advisors] would have loved to get their hands on them as well,” said Alois Pirker, an analyst with Aite Group in Boston. “It’s a bit of a horse race there, who’s growing faster. Having a big deal like this certainly validates what United Capital is doing.”
Duran said Zirkin-Cutler was a good fit for United Capital because of the client service culture within the business. “For the bank, we were the best acquirer for this group,” he added. “When you’re inside of a bank, you don’t need to have a compliance department, you don’t need to have your own technology or HR department. Zirkin-Cutler couldn’t really be spun out on their own. They could just bolt onto our system because we do all the infrastructure,” he said. “For the bank, for them to deal with an institution that has the balance sheet and the wherewithal to execute, is very important. They like very much that we could come in institutionally and deal with things. It’s a much cleaner transaction for them.”
United Capital has a financial planning office in Bethesda that will work closely with Zirkin-Cutler, he said. The acquired business will add some municipal bond management.
“We’ll have more announcements (about acquisitions) in a couple of weeks,” Duran said. The firm typically looks for advisors with assets of at least $100 million. United Capital is backed by private equity funds Grail Partners and Bessemer Venture Partners. Pirker said companies like Duran’s want to build their brand, a goal that can help with attracting larger investors down the road in the event of an IPO.