Santa Barbara, Calif.-based Mercer Advisors is merging with Houston-based Kanaly Trust to create an $8 billion registered investment advisory. The deal will add trust services to Mercer’s wealth management offerings, which include financial planning, estate planning, asset protection and tax planning.
“As people live longer, the need for a corporate trustee service grows because you can’t be administrating your own trust at age 94,” said David Barton, CEO of Mercer.
Genstar Capital, the private equity firm that purchased Mercer from Lovell Minnick Partners last year, will have a majority stake in the combined firm; Lovell Minnick, Kanaly’s parent, will retain an equity stake. Details of the deal were not disclosed.
Mercer, which has added $3.5 billion in assets over the last five years via organic growth, is now trying to grow via acquisitions. The firm added a $125 million RIA in Guilford, Conn. earlier this year, but Kanaly, with over $2 billion in assets, is the first big one.
“We wanted to stick our toe in the water first and make sure it was something that we could do and not disrupt client service, and we found that we could do that quite easily because of our corporate architecture,” Barton said. “And so we said, ‘OK, we’re in. Now let’s go after a big fish.’ And that’s what we did.”
Barton says Mercer is a national RIA firm, with 19 branches across the country before the merger. The firm plans to continue to add branches to serve clients locally and make it easier for them to meet the professionals they work with.
“We’re going to be a 30-branch, 40-branch firm in two to three years, and that is going to be very unique in the industry,” Barton said.
