A Newport Beach private equity firm led by wealth management heavyweights is looking for the next big financial entrepreneur to roll up registered investment advisers.
Everest Consolidator Acquisition Corp. said Nov. 29 that it has raised $172.5 million through an initial public offering. The company (NYSE: MNTN) sold 17.5 million units in a special purpose acquisition company, commonly known as SPAC.
“We’re looking for a founder/CEO in the wealth management space who wants to build a global business,” Adam Dooley, founder and CEO of Everest, told the Business Journal.
“We’re looking for the next Sandy Weill,” added Dooley, referencing the legendary financier who combined Travelers Group with Citicorp in a $76 billion merger in 1998.
Dooley has 30 years in financial services, including as head of wealth management at MetLife Europe. Chief Operating Officer Jacqueline Shoback has experience as a top executive at large investment funds Fidelity Investments and TIAA.
Everest directors include Peter Scaturro, a former CEO at U.S. Trust and a partner at Goldman Sachs; Elizabeth Mora, a former CFO at Harvard University where she helped oversee its $35 billion assets under management (AUM) endowment; and W. Brian Maillian, chairman and CEO of WhiteStone Global Partners LLC, one of the largest minority-owned investment firms in the U.S.
RIA Rollups
It’s the latest example of a Newport Beach firm expanding in the RIA space through an acquisition strategy.
Joe Duran built United Capital Financial Partners Inc. to $25 billion in AUM until 2019 when it was acquired for $750 million by Goldman Sachs.
Beacon Pointe LLC co-founder Shannon Eusey has used acquisitions to become the nation’s largest female-led RIA with more than $20 billion in AUM.
Last month, Beacon Pointe received a 50% investment from one of Wall Street’s best-known investors, KKR & Co. (NYSE: KKR), which has $429 billion in AUM and a $45 billion market cap.
$42T AUM
RIAs and independent broker-dealers collectively managed $12.3 trillion in 2019, representing 140% growth since 2009 compared to 86% asset growth at full-service broker dealers, also known as wirehouses, the Everest prospectus said.
The number of RIAs has increased 43% since 2010, the prospectus added.
“The RIA community providing unbiased financial advice is accelerating,” Dooley said. “There will be new business models emerging.”
Belay PE
SPACs, which are given about two years to find and complete an acquisition, have blossomed in recent years as a relatively quick way to get private companies onto publicly traded markets.
Several OC firms have gone public via this route in recent years, including Irvine’s Allied Esports (see story, page 10) and Advantage Marketing Solutions Inc., while Newport Beach’s Roth Capital Partners and several other local investment-focused firms have acted as an initial SPAC sponsor.
Critics say SPACs favor their founders over later shareholders and have lackluster returns.
Everest is a blank-check company sponsored by an affiliate of Belay Associates LLC, a Newport Beach private equity firm that Dooley formed last year.
The SPAC is “just a path” to get into the equity markets in a straightforward manner, Dooley said.
Everest is looking for an RIA with assets topping $30 billion; Dooley estimated that there are probably two dozen such candidates.
“We’re looking for a person or team that have already successfully done the rollup strategy,” Dooley said.
“If we can help them go public and list on the New York Stock Exchange, they’ll have more visibility and can use that publicly traded currency to do a lot more built on acquisitions.”
Dooley, who spent a decade in Europe, foresees the wealth management team building assets in English-speaking countries like the U.K. and Australia, places that have similar cultures and laws as in the U.S.
Deep Talent Pool
Since Dooley began the PE firm last year, he’s been able to hire executives with résumés deep in the financial world.
Belay Managing Director Saurabh Shah previously served as a senior regulator at the Securities and Exchange Commission where he helped write new rules to implement the Dodd-Frank Financial Reform Act and the initial framework for the regulation of robo-advisors.
Belay’s 16-member board of advisers include Louis Caldera, former Secretary of the U.S. Army, and Paul Shotton, who founded White Diamond Risk Advisory and was deputy Head of Group Risk Control at UBS.
Also on Belay’s advisory board is Anil Arora, who started Yodlee, one of the first fintechs in the U.S., and Rebecca Macieira-Kaufmann, who is on the board of Revolut Holdings, U.K.’s biggest fintech that was valued at $33 billion in July.
The only member without Wall Street pedigree is Samantha Harris, a former co-host of the “Dancing with the Stars” TV show; Dooley, who has known Harris for many years, said she’ll probably be conducting interviews for the company.
Everest said each unit issued in the offering consists of one share of the company’s Class A common stock and one-half of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share.
As of press time, the shares were trading at $10.11.
BofA Securities served as the sole book-running manager for the Everest offering.
