Rise Growth Partners, the RIA investing company launched last year by former United Capital CEO Joe Duran, has made its first investment this year and second since its inception. The firm has taken a minority, non-controlling interest in Grimes & Company, a $5.7 billion fee-only registered investment advisor headquartered in Westborough, Mass.
Grimes was founded over 20 years ago by Tim Grimes and is now run by his son, Kevin Grimes, who serves as CEO and chief investment officer. The 60-person team serves about 3,000 households across the country. The firm leads in investment management, actively managing custom portfolios on a discretionary basis. Duran believes that’s an area of growth for the future, while many other firms are shying away from it.
Grimes has never made an acquisition; its growth has been purely organic, Duran said. It has expanded significantly through the Schwab and Fidelity referral programs. But they’re also looking to expand geographically, and Rise Growth will help build it into a national firm, he said.
Duran added that his firm will help Grimes add five to six locations in the next couple of years, acquiring firms with $1 billion to $3 billion in assets that will be fully integrated into the RIA’s platform. Grimes is putting all the Rise Growth capital on its balance sheet to help it do so.
“There are a lot of these firms that are $1 billion, $2 billion that are delivering great client investment solutions but don’t know how to ramp up and grow, so we think they’d be very interested in joining a firm that’s aligned with an investment-centric, totally personalized bespoke portfolios for clients,” Duran said.
Duran said he’s been talking to firms with $1 billion or $2 billion in assets that weren’t quite large enough for Rise Growth to back. And many of those firms are not interested in joining the large, national players because those firms already have fully priced valuations.
“The really interesting firms want to be part of building the next firm, not just joining a firm that’s already national because that’s where all the equity creation happens,” Duran said. “Joining a $6 billion firm and helping build a $30 billion firm—they get a much larger voice; they get a seat at the table; and they also participate in the equity, which is a big part of doing this.”
“The Rise team immediately understood the scalability of our business, the uniqueness of our model and our exciting vision for the future,” Grimes said in a statement. “With their expertise and resources, we’ll be positioned to multiply our impact while maintaining the collaborative culture and relationship-driven client experience that have defined Grimes and its success to date.”
In September 2023, Duran, who sold his company, United Capital, to Goldman Sachs in 2019, revealed details about his new venture. He said Rise Growth would acquire roughly 30% stakes in next-generation RIAs. In exchange, it will provide growth capital and resources to help the firms become national RIA platforms with $10 billion or more in assets.
About a year ago, Rise Growth raised more than $250 million in funding from its management team and Charlesbank Capital Partners, the middle-market private equity firm that also backs Lido Advisors. Charlesbank took a majority stake in the new company.
The company announced its first investment last August, taking a minority stake in Bleakley Financial Group, a hybrid RIA with nearly $10 billion in client assets. Duran said his firm invested more than $50 million.
Rise Growth is one of a few new firms focused on taking minority stakes in RIAs. Karl Heckenberg, the former CEO of Emigrant Partners, launched his private equity company, Constellation Wealth Capital, at the end of 2023.
Last year, Jim Dickson, founder and former CEO of Sanctuary Wealth, announced the launch of Elevation Point, an investment firm he says will take minority stakes in RIAs with $200 million to $3 billion in client assets and help those firms grow.
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