Andy Berg is stepping down as CEO of Homrich Berg, after growing the Atlanta-based registered investment advisory firm to $14 billion in assets over nearly 3 1/2 decades.
Effective Jan. 1, Homrich Berg President Thomas Carroll will take over as CEO and Berg will remain in the role of chairman of the firm’s board of directors. The moves are part of a planned, multi-year transition begun when Carroll was hired in 2020.
Berg co-founded Homrich Berg in 1989 along with David Homrich—and a $100,000 loan from his father. Both from tax backgrounds, the duo managed less than $10 million for clients in the early years. By the time Home Depot co-founder Arthur Blank, a client of theirs, persuaded Homrich to leave to help him build a family office in 2001, the pair had grown the firm to nearly $500 million in assets under management.
Thirteen years and several deals later, the firm has established itself as a regional integrator, overseeing more than $14 billion in assets for about 3,000 families from offices in Georgia, Florida, South Carolina and Tennessee.
“Building Homrich Berg into the successful client-focused, independent, fee-only wealth management firm it is today has been the highlight of my career,” Berg said in a statement. “Thomas shares our mission, vision and values, and I am confident he is the leader who will support the core of what makes Homrich Berg so special. I look forward to continuing to serve on the board and engaging with our clients and employees in the years ahead.”
Carroll joined Homrich Berg after more than 20 years with SunTrust Bank, where he was an advisor and executive vice president heading up the wealth management division, in addition to serving as CEO of a multi-family office subsidiary of the bank. Berg, with whom he had a longstanding relationship, had been trying to recruit Carroll for years but it wasn’t until he floated the idea of bringing him in as part of a succession plan that Carroll joined in January 2020—two months before the global pandemic hit.
“It was kind of a tough start because I hadn’t even met all of our teammates,” Carroll said. “But I slowly started taking on more of the responsibilities and bringing talented people over to the firm ... so, by the time this actually happens, it’s pretty seamless because I’ve already been handling most of the day-to-day operations.”
Homrich Berg was managing about $7 billion when Carroll started and he has helped accelerate the firm’s inorganic growth strategy while maintaining an organic growth rate of around 7%, independent of financial markets, effectively doubling assets in less than four years. He plans to accelerate and formalize Homrich Berg’s mergers and acquisitions process as the firm continues its regional expansion, beginning with hiring a head of corporate development.
“The future will look a lot like the past,” Carroll said. “It’ll just be slightly different. We’ll continue to grow organically but will lean a little more into the M&A side and advisor lift-outs, largely so that we can create some scale, allowing us to deliver more services, lower costs and invest in more technology.”
All of Homrich Berg’s approximately 175 employees are W-2 and about a fifth are equity partners, a percentage the firm is working to increase. Acquired practices are offered equity and are expected to adopt Homrich Berg branding, investment “philosophy,” technology stack and client approach, but may maintain operations locally.
“We believe we have a unique place in the industry as it relates to M&A that will be attractive to certain targets,” said Carroll. “We want broad equity ownership, and we don’t require centralization of operations functions, which a lot of firms do and generally requires some headcount reduction. We also don’t require firms we acquire to start selling products.”
The firm sold a minority stake to growth-oriented private equity firm New Mountain Capital two years ago and secured $75 million in debt financing last year. Carroll doesn’t anticipate needing additional capital in the near term, but said, “I never say never.”
“They've made us better in a lot of different ways,” he said of New Mountain. “We feel like we don't need to raise additional equity capital now but if there's an opportunity for us down the road to do a strategic acquisition that requires additional equity capital, then we'll obviously look at it at that time.”
While Homrich Berg doesn’t set out growth goals in terms of AUM, Carroll expects to see the firm double assets again over the next three years.
“As I take over the CEO role, I’m starting to think about kind of a three-year vision of what we want this firm to be,” he said. “I think another double would be appropriate, especially as we do start to quicken M&A. Getting into the $25 billion to $30 billion range would be kind of an aspirational goal, but we're working through that strategic plan now.”
Carroll will remain in the dual roles of president and CEO until the time comes for him to think about the next succession.
“At some point we'll identify a successor for me years down the road and fill the president role at that time,” he said.
