PE Firm Gains Majority Stake in Edelman FinancialPE Firm Gains Majority Stake in Edelman Financial

Private equity firm Hellman & Friedman is set to become a majority owner of Edelman Financial Services, although founder Ric Edelman will continue to hold the largest individual stake in the $15 billion advisory firm. 

Under the publicly disclosed terms of the agreement announced Monday, affiliates of Hellman & Friedman will own the Virginia-based financial services firm in partnership with Edelman’s senior management team.

The current majority owner, Lee Equity Partners—which helped take Edelman private three years ago for $257 million—also will retain meaningful equity ownership in the firm. The cost of Monday’s deal was not disclosed. 

Edelman said in a statement Monday that the deal would help the firm enhance its services and provide the opportunity to grow its team over the next few years.

Along with providing Edelman Financial with the resources to grow, Hellman & Friedman also will help the firm find a new CEO. Edelman Financial announced in January that it was looking for a new CEO in January, so that Ric Edelman, who is also the firm's executive chairman, could focus more on strategic business concerns, such as the firm's educational activities and client growth.

​“The outstanding financial planners and leaders at Edelman Financial have built an extraordinary business by delivering sound financial advice for clients,” said Allen Thorpe, managing director of Hellman & Friedman. “We embrace their tradition and look forward to investing in the business to help Ric and his team accelerate the firm’s success.”

This is not the first foray into financial services for Hellman & Friedman. In addition to its past investments in Franklin Templeton Investments, the NASDAQ and Artisan Partners, Hellman & Friedman also co-led the acquisition of LPL Financial in 2005. After LPL completed its initial public offering in 2010, Hellman & Friedman distributed its shares and fully exited its investment in 2013.