Family Office
RIA aggregator makes its first acquisition of 2008
South Florida firm Foldes slated to become WealthTrust's eleventh affiliate. Investment-advisory holding company WealthTrust has agreed to purchase a majority stake in Foldes Financial Management, Miami-based wealth-management firm with about $400 million in assets under management. The buy-in will give WealthTrust 11 affiliates in 12 states with a total of $7.6 billion in client assets.
Details of the transaction weren't disclosed.
"We are particularly pleased to have an affiliate in the very attractive South Florida market," says WealthTrust's CEO Rusty Benton. "Although Foldes had many suitors, we are thrilled and honored that they chose to affiliate with us."
Long-term planning
Foldes did the deal with WealthTrust for several reasons. It wanted backing for a series of possible sub-acquisitions, it wanted to retain and groom in-firm executives for top leadership roles, and it wanted increased efficiencies in its back-office, compliance and marketing functions.
"Affiliating with WealthTrust allows us to significantly enhance our growth potential, while bringing us additional resources to better serve our clients," says Foldes' CEO Steven Foldes. "At the same time, the partnership facilitates succession planning to assure we can deliver exceptional client service for generations to come."
Foldes is the first acquisition WealthTrust has publicized this year. In December 2007, it acquired Cleveland-based Fairport Asset Management, an open-architecture investment advisory with about $1 billion in client assets. About a month before that, it bought into Radnor, Pa.-based Axiom Asset Management. Prior to that little flurry, its last acquisition was of Scottsdale, Ariz.-based DeGreen Wealth Management (now WealthTrust Arizona) in the fall of 2006.
The DeGreen deal came shortly after WealthTrust got a capital infusion from New York-based private-equity firm Circle Peak Capital. That put WealthTrust back on the acquisition trail after a two-year hiatus imposed by regional brokerage Morgan Keegan (now part of Birmingham, Ala.-based Regions Financial), its former owner.
Late last year, Benton said he expected WealthTrust "to do a couple [of acquisitions] a quarter" in 2008.
New York-based M&A consultancy SilverLane Advisors advised Foldes on the deal; Nashville-based Harwell Howard Hyne Gabbert & Manner and Chattanooga, Tenn.-based Joseph Decosimo and Company advised WealthTrust. -FWR
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