Rise Growth Partners, the RIA investing company launched earlier this year by former United Capital CEO Joe Duran, has made its first investment in taking a minority stake in Bleakley Financial Group, a hybrid registered investment advisor with nearly $10 billion in client assets.
Duran said his firm invested more than $50 million. This follows news in February that 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 will take a majority stake in the new company.
Last September, 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 with between $1 billion and $7 billion in AUM. In exchange, it will provide growth capital and resources to help the firms become national RIA platforms with $10 billion or more in assets.
Bleakley is, of course, outside of that target, and Duran says after speaking with dozens of firms throughout this process, his company will now target RIAs with $3 billion to $8 billion in assets.
“What I realized is sub-$3 billion, these firms don’t have the platform to scale and typically haven’t made the necessary investments, don’t have the leadership team,” Duran said.
During the search, Duran was looking for firms with three things: a strong leadership team that can think big, a scalable platform that has already invested in the technology, client experience, centralized investments and planning, and a growth strategy.
“Us finding the combination of the executive team, the platform and the growth strategy—I just think it’s hard to find below $3 billion,” Duran said.
Fairfield, N.J.-based Bleakley was founded in 1985 by twin brothers Scott and Andy Schwartz as a practice affiliated with Northwestern Mutual. In the decade or so since leaving the insurance firm, Bleakley has grown significantly, primarily by recruiting 1099 advisors to the platform. After leaving Northwestern Mutual, the practice joined Private Advisor Group, an office of supervisory jurisdiction of LPL Financial. But they decided to launch their own RIA in 2022, while retaining the affiliation with LPL. About 98% of the firm’s business is advisory.
The firm is now 100% management-owned by four partners, Scott and Andy, Michael Axelrod and Jack Cooney. This is the first outside capital they’ve taken.
“The reality was, over the last three years, a lot of people have taken a run at us—some big firms, private equity firms—all really good quality firms,” Andy Schwartz said in an interview with WealthManagement.com.
“We wanted more than money because it wasn’t about how much money we could make now,” Andy said. “We wanted expertise. We wanted people that are really terrific, top of their game, that I could not afford to put on our own P&L. Joe put together an incredible team of professionals.”
The founders maintain control of the business, but the investment allows Bleakley to introduce an equity ownership program to its advisors.
“Rise was able to come in and show us how to create an economic structure, where all these 1099s, if they choose to, can become partners,” Andy said. “The advisors that we’ve been recruiting over the years now, we can do the same.”
Advisors who roll into the program will participate in any kind of liquidity event that may occur in the future.
Bleakley will continue to grow via recruiting, but Rise Growth’s investment will also allow the firm to enter the M&A game for the first time. Rise Growth will help finance any deals Bleakley pursues.
Duran had initially said Rise Growth would invest in six to eight RIA firms, but he says it will probably end up being around four firms, given the time and energy they need to commit to each one.
Duran has been building out his management team over the last several months. In October, he brought on Terri Kallsen as managing partner and head of the operating partnership team. In April, the firm hired Stacy Coffey, a former senior vice president of wealth strategies at Wealth Enhancement Group, as managing director and head of advisory partnerships.
He also snagged Will Armenta, a co-founder of Opto Investments, earlier this year as managing director, working alongside Brian Shenson, managing partner and COO, to help firms fill gaps in their existing technology and operating platforms. In June, he added Jennifer Geoghegan as its chief marketing officer and Tony Ling as managing partner, investments, and last month, he brought over Ryan Beck, former director and head of partner integration at Sanctuary, as vice president of advisory partnerships, according to his LinkedIn profile. Beck previously worked with Duran at Goldman Sachs Personal Financial Management.
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.
In June, 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. Working with Mark Penske, founder and chairman of United Atlantic Capital and son of legendary race car driver and team owner Roger Penske, Elevation Point acquired Mount Yale Capital Group, an RIA and Outsourced Chief Investment Officer with $3.4 billion in assets under management, to build the firm's infrastructure.
