Roaring Start to RIA M&A Deals: ECHELON
Mergers & acquisitions (M&A) in the registered investment advisor (RIA) space remained active in the first quarter. There were 90 wealth management deals worth $570 billion announced, a 20% rise from the same period the previous year, according to RIA investment bank ECHELON Partners’ 1Q24 RIA M&A Deal Report.
This ranks as the second most active first quarter on record. Echelon highlights that strategic acquirers, such as RIAs and broker-dealers, continue to dominate the wealth management M&A landscape, accounting for 85.6% of transactions.
Private equity was involved in 69% of transactions, accounting for more than $200 billion in assets.
The quarter’s largest transaction was LPL Financial’s $100 billion acquisition of Atria Wealth Solutions and its 2,400 advisors, which was announced in February.
Other notable significant deals include Mariner Wealth Advisors, a Kansas City-based RIA firm, acquiring $90 billion AndCo Consulting and Focus Financial Partners acquiring management’s stake in $30 billion SCS Financial.
Constellation Wealth Capital‘s direct investments in Lido Advisors and its separate investment in Perigon Wealth Management are notable minority deals. Several private equity firms made majority stakes during the quarter, including Flexpoint Ford’s acquisition of $80 billion AUM Public Trust Advisors..
While total activity for the quarter was lower than in the fourth quarter of 2023, ECHELON noted that the fourth quarter of a year is typically the most active one for transaction announcements.
ECHELON attributes the high level of activity to the culmination of pending deals from 2023. “This sets the stage for a year of robust M&A activity, helped by recent strong market performance and a stabilizing interest rate outlook,” the report stated.
As 2024 has already seen 35 deals of $1 billion or more in assets under management, the average AUM per deal has risen to $1.839 billion. In 2023, it was $1.668 billion and in 2022 it was $1.622 billion. ECHELON expects 130 of these deals to close in 2024, which would be a 12.1% increase over last year.
ECHELON forecasts that 330 total deals are expected in 2024 involving an RIA as the buyer or seller. “Overall transaction count is likely to show a year-over-year increase, and we also expect average assets per deal to substantially surpass last year’s level.”