Carlyle Group Buys Minority Stake in Avalon Advisors

The deal highlights private equity investors' growing interest in the financial advisory business model and wealth management industry.

In another deal announced earlier this month, independent broker-dealer First Allied joined in an acquisition deal with private equity firm Lovell Minnick Partners, allowing the BD and Lovell to buy First Allied from parent Advanced Equities Financial Corp. LPL Financial was a leader in the private equity-driven sale of BDs back in 2005, when it sold a majority equity interest in the company, about 60%, to two private equity shops.

Founded in 2001, Houston-based Avalon Advisors employs 25 people and manages equity, fixed income and balanced portfolios for wealthy families, endowments, foundations, trusts and institutions across the United States. The firm is led by four of the founding partners, Robert Gauntt, Henry Lartigue, Willie Langston and Kevin Lilly.

Based in Washington, D.C., the Carlyle Group is a global alternative asset manager with approximately $153 billion of assets under management across 89 funds and 49 fund of fund vehicles as of March 31. Carlyle invests around the world in corporate private equity, real assets, global market strategies and fund of funds solutions. The Carlyle Group employs more than 1,100 people in 35 offices across six continents.

Carlyle Managing Director Randy Quarles, who was involved in putting the deal together, previously served as undersecretary of the U.S. Treasury during the administration of President George W. Bush. Before entering the Bush administration, Quarles was a partner with the law firm of Davis Polk & Wardwell.

Advising Carlyle on the deal were financial advisor Samoset Capital Group and legal counsel Davis Polk and Wardwell. Advising Avalon were financial advisor Silver Lane Advisors, legal counsel Vinson & Elkins and regulatory counsel Dechert.