In a trend that shows no signs of slowing, private equity firms are increasingly buying into or buying up RIAs.
One example: The Mather Group, on Barron’s list of the Top 100 RIAs for the past five years, is majority private-equity owned and is indeed experiencing rapid growth since the Vistria Group acquired it in 2022.
One of TMG’s keys to success is efficiency.
“When we sit down with a prospect, we do a free initial financial plan … to see if there might be opportunities to be more efficient,” Jennifer des Groseilliers, the group’s CEO, says in an interview with ThinkAdvisor.
“[It’s] very effective,” she adds. “Many times, clients want a second set of eyes on their situation to make sure they’re doing everything in their best interest.”
With Vistria its capital partner, TMG has continued to invest in the firm, as well as improve cash flow and boost technology upgrades.
With 14 offices nationwide, the Chicago-based RIA has about $14 billion in assets under management. One area of client focus is executives of Fortune 500 companies who are planning to retire in one to three years.
Des Groseilliers joined TMG as chief revenue officer in February. Five weeks later, the CEO resigned, and she stepped in to head the firm in the interim. Two months later, she was appointed permanent CEO.
In the interview with des Groseilliers, who previously was a partner at WestPoint Financial Group, CEO of MassMutual Illinois, and a managing partner at MetLife Premier Client Group, she discloses other forces powering growth, such as a business development team, an in-house tax department and special services for people leaving or coming to the United States.
Here are excerpts of our conversation:
THINKADVISOR: How does The Mather Group benefit from being majority-owned by Vistria Group, since 2022?
JENNIFER DES GROSEILLIERS: What’s nice about being aligned with a capital partner is that it gives us the ability to continue to invest in the business.
It also helps with improved cash flow and flexibility to pursue market expansion, technology upgrades and strategic acquisitions to fuel our growth and profitability.
How did the Vistria acquisition come about?
They came in as our partner when the founder of our firm, Stewart Mather, passed away, pretty suddenly, of terminal cancer at the age of 42.
What’s the secret of your firm’s growth? Over the past 24 months, your assets under management have grown 41%, as of July.
Continuously enhancing our offerings and strengthening client connections are driving steady growth. Building on the strong momentum from this year, we’re already witnessing positive results.
This commitment has contributed to a 12% year-over-year rise in AUM, as of July 2024.
What specifically in the way you do things is responsible for all the organic growth?
We have a very strong business development team whose No. 1 goal is to bring in new clients.
We also have a new generation program, a strong summer internship program, a custodial referral program, client referrals, and of course we nurture our relationships with various centers of influence.
What’s your client niche?
Our typical client is an executive at one of the Fortune 500 companies that’s highly invested in their retirement plan and usually looking to retire in one to three years.
Most of these clients come from our business development team and referrals.
What’s your minimum?
One million dollars in assets. On average, our clients have about $2.5 million with us. We also have a family office that focuses on clients with $25 million and above.
What services do the latter clients receive vs. those with $2.5 million?
The family office team is a little more sophisticated in the advice they give because of the complexity that comes with clients with greater net worth.
We provide them with sophisticated financial planning, investment management and tax strategies — we have an in-house tax department to give tax advice and prepare returns — estate planning, and philanthropic planning, which is very big for the family office.
