Dynasty Financial Withdraws IPO Bid, Sells Minority Stakes to Schwab, ABRY Partners
Dynasty Financial Partners withdrew its planned initial public offering (IPO) amid a volatile equity market environment that has largely put the kibosh on IPO deals this year.
Dynasty will withdraw the Form S-1 it had filed with the Securities and Exchange Commission. Companies planning to go public must file an S-1 to provide information to investors.
Instead, the St. Petersburg, Florida-based firm, a coalition of 48 registered investment advisory firms that collectively manage about $68bn in assets, sold minority stakes to Boston-based private equity firm ABRY Partners and brokerage and RIA custodian Charles Schwab.
Financial terms of the transaction, including the size of stakes taken by Schwab and ABRY, were not disclosed.
“After evaluating the state of the public markets, our board decided to have a handful of conversations with potential private investors,” Shirl Penney, president and CEO of Dynasty, said.
Dynasty’s clients own and operate independent RIAs, and the company, concurrent with the Schwab and ABRY investments, has executed minority equity investments in those firms. In turn, most of the firms received Dynasty equity, the company said.
The transaction marks something of a departure for Schwab. In the past, the discount broker and custodian has said it was not interested in acquiring financial advisory firms.
Bernie Clark, head of Schwab Advisor Services, explained: “As advocates for independent advisors, we are thrilled to invest in a firm that shares our values of empowering advisors with the technology, tools, and resources they need to build even stronger businesses.”
ABRY, for its part, has already purchased stakes in the wealth management sector, including recent investments in Newport Beach, California-based RIA Beacon Pointe Advisors and Oak Brook, Illinois-based custodian Millennium Trust Company.
The capital raise will be used to make “meaningful” investments in technology and technology integration, add services, build out its turnkey asset management platform and invest in talent.
In September, Dynasty closed a $50mn credit facility from RBC Capital Markets, UMB Bank, J.P. Morgan, Citibank, and Goldman Sachs Bank that provided access to additional funds.
