Carlyle Purchases Minority Stake in Prime Capital Financial
Prime Capital Financial has sold a minority stake to the Carlyle Group as part of a $600 million hybrid capital solution, which values Prime Capital at $1.8 billion.
The investment will go towards supporting Prime Capital’s long-term growth strategy and will allow the firm to use Carlyle’s capital and resources while investing in its wealth management platform.
As part of the investment, which was made through Carlyle’s global credit platform, Boston-based private equity firm Abry Partners will exit its role in Prime Capital. The exit is Abry’s latest realization in financial services, a sector it has invested in for decades.
Abry Partners originally started its partnership with Prime Capital in 2023 after the private equity shop acquired a minority stake and joined the firm’s board to provide capital for future acquisitions.
Following the transaction, which is expected to close in mid-September, Prime Capital will retain its leadership team and ownership, and its full advisory team will continue to hold ownership of the firm, according to Prime Capital.
“This partnership is not about changing who we are—it is about strengthening what we have been building,” said Scott Duba, president of Prime Capital Financial. “Our mission and vision remain the same. What has changed is our ability to invest even more aggressively in our people, capabilities and the clients and advisors we serve.”
The investment from Carlyle builds on the investment firm’s involvement with large registered investment advisory firms. In April, Carlyle announced its plans to buy a majority stake in RIA MAI Capital Management in a transaction valued at over $2.8 billion.
Prior to that, Carlyle acquired a minority interest in Captrust Financial Advisors in 2023, valuing the wealth management firm at over $3.7 billion.
Wealth management dealmaking has revved up in the first half of the year, with a total of 225 transactions involving RIAs with at least $100 million in total assets, representing a 39% increase compared to 162 deals last year, according to Berkshire Global Advisors’ mid-year Wealth Management M&A Report.
The deal also comes merely days after Prime Capital and Edelman Financial Engines filed a joint injunction with the U.S. District Court for the District of Delaware to settle a multi-year lawsuit, which Edelman initially claimed Prime Capital poached its planners and engaged in soliciting client data, dating back to 2024.
In March, Edelman was granted a restraining order against Prime Capital after the firm stated that Prime Capital promoted its planners to breach their employment contracts with Edelman.
In an emailed statement to Connect Money, Edelman stated, “We are pleased to have reached a resolution that reflects the importance of protecting client relationships and the confidential information entrusted to our business.”
“Our focus remains on investing in our planners, empowering them to do their best work, and helping more people achieve their financial goals through trusted, long-term relationships.”
As a result of the settlement, Prime Capital has been barred from further encouraging its Edelman recruits to seek clients for about a year following their exit from the firm.
Additionally, Prime Capital has up to 14 days to reimburse Edelman for its mailing fees regarding written notices that were sent to clients informing them of a planner’s switch to Prime Capital no more than seven days prior to the planner’s anticipated departure date.
