Focus Financial Partners, armed with $50 million in new capital from private-equity backers, said last week that it has bought an interest in Bridgewater Wealth and Financial Management LLC.
Bridgewater, a Bethesda, Md., firm created from combining a registered investment adviser business with a certified public accounting practice, advises clients on $200 million of assets, Focus said in a statement.
“We believe there is tremendous opportunity for growth in the wealth management space in our region and beyond,” Ron Rubin, Bridgewater's founder, said in the statement.
The purchase is the third in four months for Focus, a roll-up firm that provides cash and equity stakes in itself in return for a percentage of revenue produced by its partner wealth management firms.
Last month, Focus exercised an option to buy the revenue flow of LLBH Group Private Wealth Management, an RIA founded by former Merrill Lynch & Co. Inc. brokers. In October, it did a deal with Joel Isaacson & Co., a wealth manager and tax consultant with about $1.4 billion in assets and more than 700 clients.
The recession hit Focus hard, forcing it to scramble to acquire more capital to deal with its debt service and fund new acquisitions at a time when its partner firms were battling asset deterioration. The Isaacson arrangement was Focus's first full acquisition since July 2008.
The company, founded by a group of former American Express Co. banking consultants in 2004, made its first acquisitions in 2006 and now has 19 partner firms. In October, it said that it had renegotiated a bank credit line led by Bank of America NA and received $35 million in preferred stock and debt from Polaris Venture Partners and $15 million from Summit Partners, its original private-equity backer.
The firm didn't say how much equity it gave to the firms, which have seats on its board.
Progressive Financial Strategies, the parent of StrategicPoint Investment Advisors, one of Focus's first partner firms, sued Focus in November for allegedly refusing to give it access to the roll-up firm's books and records. The suit is proceeding in Delaware's Chancery Court.
Bridgewater describes itself as a “boutique firm with institutional sophistication” that services entrepreneurs, business executives and professionals in the Washington area. It said that it has particular expertise in handling financial issues for first-generation wealth and includes athletes and entertainers among its clientele.
“Their client retention and growth through turbulent markets and economic conditions demonstrates the value Ron and his team provide clients,” Focus chief executive Ruediger “Rudy” Adolf said in a news release announcing the deal.
E-mail Jed Horowitz at [email protected].
