Hightower has agreed to acquire a majority interest in NEPC, an institutional consulting firm and outsourced chief investment officer (OCIO). The deal will bring institutional research and investment capabilities to Hightower advisors.
With the addition of NEPC, Hightower and its affiliates will represent over $1.8 trillion in assets under advisement and $258 billion in assets under management.
“As more private wealth investors express interest in allocations to private market investments, NEPC’s institutional research and investment capabilities will bolster Hightower’s existing set of wealth management solutions for its advisors and their clients,” Hightower said in a statement. “With this transaction, NEPC’s clients will continue to receive investment advisory and OCIO services while creating a new growth channel in partnership with Hightower.”
The deal gives Hightower advisors access to NEPC's OCIO services and institutional private market fund managers.
This also creates a new growth market for NEPC in private wealth. The company will be able to expand its investment products to this segment and invest back into the business. The partnership with Hightower also boosts its investment research capabilities and infrastructure, as well as its ability to attract and retain top talent.
“Our relationship with NEPC stemmed from the exciting and distinctive opportunity that both businesses can offer the private wealth market when combined,” Hightower Holding Chairman and CEO Bob Oros said in a statement. “In partnership with NEPC, Hightower advisor practices will have expanded access to investment management solutions, research capabilities and a compelling set of investment opportunities.”
Hightower expects to keep NEPC’s executive team and investment process intact. Once the deal closes, NEPC Managing Partner Mike Manning will join Hightower’s board of directors.
NEPC, originally known as New England Pension Consultants, was founded in 1986 by Chairman Emeritus Richard Charlton. The firm is employee-owned and has more than 360 employees.
This follows news last month that Hightower took a stake in Charles D. Hyman & Company, an RIA in Ponte Vedra Beach, Fla., with $2.3 billion in client assets.
Hightower is owned by private equity firm Thomas H. Lee Partners; in May, WealthManagement.com reported the private equity firm took Hightower off the market because it didn’t get the price it was looking for from potential buyers, according to sources close to the firm and the investment bankers involved.
In April, Hightower named Gurinder Ahluwalia, the lead director of the firm’s board of directors, as president, a newly created position. Ahluwalia is an executive partner in THL's financial technology and services vertical.
Over the last several years, many in the RIA business have made concerted efforts to serve the institutional market. For example, one of the biggest RIAs in the country, Mariner Wealth Advisors, acquired two institutional consulting firms, AndCo Consulting and Fourth Street Performance Partners, in early February, adding $104 billion in assets and 100 employees.
