Reverence Capital Partners buys Advisor Group

Advisor Group put weeks of speculation to rest late Thursday when it said private-equity manager Reverence Capital Partners agreed to acquire 75% of the broker-dealer network from Lightyear Capital, PSP Investments and other investors.

Financial terms of the deal were not disclosed, but market sources earlier on Thursday had privately pegged the price tag for Advisor Group, a network of four independent broker-dealers, at close to $2.3 billion.

The four broker-dealers in the Advisor Group network are: FSC Securities Corp., Royal Alliance Associates Inc., SagePoint Financial Inc. and Woodbury Financial. According to InvestmentNews data, the four combined to produce $1.7 billion in total revenue last year.

Also according to InvestmentNews data, there were close to 11,800 total registered reps at the four firms at the end of last year, with 6,500 of those advisers producing revenues.

Under the terms of the transaction, Jamie Price will continue to serve as CEO OF Advisor Group, according to the companies.

Valerie Brown, currently executive chairman, will retire. She will remain an investor in the company.

Founded in 2013 by former Goldman Sachs executives, Reverence Capital focuses on five sectors: depositories and finance companies; asset and wealth management; insurance; capital markets; and financial technology and payments.

As part of the transaction, Advisor Group, in coordination with Reverence Capital, expects to establish an adviser recognition and retention program, with details to be announced between signing and close, the companies said in a statement.

In 2016, Advisor Group, at the time a subsidiary of American International Group, was purchased by Lightyear Capital and PSP Investments. It has grown since then through acquisitions and recruiting, with client assets under administration of $268 billion, up $78 billion from the end of 2017, according to the company.