Orion and Brinker Capital to Form $40 Billion Firm

headshots of fintech CEOs Eric Clarke and Noreen Beaman

After several months of speculation about the future of Orion Advisor Solutions, the platform provider says it is merging with investment manager Brinker Capital to form a firm with some $40 billion in managed assets.

The new entity will do business as a technology firm and turnkey asset management program (or TAMP) business, according to Orion CEO Eric Clarke and Brinker CEO Noreen Beaman, who spoke with ThinkAdvisor in a joint phone call on Sunday.

The move comes as Genstar Capital says it is making an investment in the new entity, joining TA Associates, which currently supports Orion.

While there were industry reports of Orion putting itself up for sale earlier this year, the firm was actually speaking with Genstar about a possible merger with Brinker.

"I said to the press at the time that this [rumored plan for a sale] was not the case," Clarke said. "Our business is always evaluating strategic opportunities, … and now with this [merger with Brinker], the story's become more interesting with a 180-degree difference."

Genstar "brought this up and asked our thoughts about it, and I immediately got excited about that prospect," he said. "With Brinker's incredible reputation, we saw so many ways [its] team could augment and be additive to our vision and accelerate our momentum to serve advisors …," he explained.

According to Genstar Managing Director Tony Salewski, the merger means "we'll be able to redefine the wealth management industry and capitalize on the powerful market growth trends favoring the merger of these two industry-leading companies."

More Details on the Deal

As for doing a deal in a pandemic, Beaman, who is set to become president of the combined investment operations, says the context is "a positive one, given that both businesses are resilient and that the staff of both organizations can work from home."

The advisors served by the combined entity also "are working to differentiate themselves today and perhaps for much longer," she explained. "It's a great time to consolidate the businesses."

"Think about how fast the world is moving, as [investors] are demanding more and more" in terms of technology, Beaman added.

Earlier this year, Orion said it works with some 2,000 advisors and has about $1 trillion in assets under administration on its platform.

Brinker counts about 4,000 financial and insurance advisors as clients. Its business includes tailored high-net-worth investment portfolios and services; behavioral finance tools and training led by Chief Behavioral Officer Daniel Crosby; and access to multi-asset class investments, such as Destinations mutual funds (which have about $12 billion in assets).

Future Focus

While Orion and Brinker have its hands full bringing together their 1,015 employees and operations that are based in Omaha, Nebraska, and Berwyn, Pennsylvania, it also is looking ahead a bit — now that it has access to more capital and other resources.

"We feel with our [post-merger] scale, our capital and our strong balance sheet we are positioned for further success," Clarke said. Plus, its rivals "are doing lots of things that we admire and can learn from to remain competitive."

Does this include more acquisitions? "We have to absolutely continue to scale the organization as we move forward," he said.

The firm has "no specific plans" for another deal at present, but "we have to evaluate strategic mergers and acquisitions" in the future, Clarke added. "And we now have incredible opportunities to do just that."

Its financial partner appears to be behind that plan. "We … look forward to partnering with Genstar on Orion's merger with Brinker and their future opportunities for growth," said Roy Burns, a managing director at TA Associates, in a statement.