Southwestern Investment Group, a Franklin, Tenn.–based hybrid advisory firm with more than 60 advisors and about $5.8 billion in assets, announced that Merchant Investment Management has taken a noncontrolling, minority stake in the firm. Terms of the deal, which closed in November, were not disclosed.
Together with Merchant, SWIG’s management team and key advisors also purchased all outstanding equity interest from parent company Southwestern Family of Companies, a deal announced in December. Merchant provided capital to become a minority investor, as well as the debt facility for the principals and their advisors to buy their shares, paving the way for its advisors to participate in equity ownership.
As the firm separates from Southwestern, it will launch a new name and brand later in the year, and it has hired Optima Group to help with that process.
"We're incredibly grateful for the time we've spent as part of the Southwestern Family of Companies,” said Jeff Dobyns, CEO of SWIG, in a statement about the RIA’s separation from Southwestern. “It was the foundation that allowed us to grow and thrive all these years. Though it's time for a new phase in our journey, we will always stay true to the roots we put down as part of this family."
SWIG was founded in 2002, and has grown to more than 60 advisors serving 13,000 clients from its offices in Tennessee, Alabama, Texas, Iowa and Nebraska. From 2020 to 2021, the RIA grew its AUM 34%.
The RIA has a unique approach to developing young talent, said Matt Brinker, managing partner at Merchant. Instead of hiring experienced career changers or advisors with an existing book of business, SWIG brings in new advisors in their 20s and gives them the opportunity to learn alongside experienced advisors in a two-year mentoring program.
“They’re incredible at recruiting and cultivating young advisors, and growing their advisor base organically,” Brinker said. “It’s a little bit of a unicorn, where it’s a business that is biased toward younger advisors, growing organically, not any M&A—haven’t really been focused on that yet, although it’s something we will certainly integrate into the growth strategy—and it’s in a great market.”
The firm uses Raymond James Financial Services as its broker/dealer.
The deal follows news in December that Private Advisor Group, the Morristown, N.J.–based RIA and office of supervisory jurisdiction affiliated with LPL Financial, took on Merchant as its first outside investor. CEO RJ Moore said the investment was a first step toward rolling out an equity program to its advisors.
