Pathstone, a partner-owned and private equity-backed multifamily office based in Englewood, N.J., has agreed to buy Brainard Capital Management in Austin, Texas.
Founded by Owen Brainard in 2004, the firm administers approximately $2 billion in client assets for ultra-high-net-worth individuals, with a niche focus on tech entrepreneurs.
“Owen is brilliant, has incredible gravitas and has really built this incredible niche in the tech entrepreneur space,” said Pathstone CEO Matt Fleissig. “We’ve been looking to find a way into Silicon Valley for some time. As the tax laws and other things have changed there, there has been an influx of those professionals to Austin. In our opinion, Austin is the No. 1 demographic location for the ultra-high-net-worth.
“We have these post-liquidity services that are really designed and built for a hundred-million-dollar families and up,” he said. “With the expertise that Owen brings, we can really help in that phase for those clients who come on board.”
The Brainard team will gain access to Pathstone’s infrastructure, expanding suite of services and network of professionals to improve client service and expedite growth.
“Brainard Capital has an enviable roster of Silicon Valley clients that present unique challenges and opportunities,” said Peter Nesvold, partner at Republic Capital Group, the financial services investment bank that advised Brainard on the deal.
“By aligning with Pathstone, Brainard will be able to dramatically increase the depth of offerings they can provide to these clients,” he said.
“We believe that combining the resources and skill sets of our organizations will enhance our ability to service our clients at all stages of their wealth planning," Brainard said.
The combination will bring Pathstone’s total advised, administered and managed client assets to more than $80 billion—up from $15 billion in late 2019. The firm has offices in 17 cities nationwide, and a little more than half of the firm’s 350 employees are also shareholders.
Fleissig said the firm aims to triple or even quadruple AUM over the next four to six years.
Last month, Pathstone announced it was taking on private equity partner Kelso and Co. in support of that goal. At the same time, Lovell Minnick Partners, which bought a stake in 2019, committed to providing additional capital.
“All of this is part of our vision to become the national brand for the ultra-high-net-worth,” Fleissig said. “We don't really believe that someone has done that yet in the RIA space. That’s why [acquiring affiliated trust company] Willow Street (in 2022), and having trust services to truly be a multigenerational firm for multi-generational families, was important.”
Pathstone has completed just 11 deals over the past 13 years, Fleissig pointed out, but is continuing to look for opportunities to add complementary services.
“Whether that be cyber, legal, certain types of insurance,” he said. “Those are all areas that we're going to continue to focus on to make sure that we can serve our clients in the right way.”
