Are LPL and Osaic in the hunt for the old United Capital?

With Goldman Sachs considering jettisoning the registered investment advisor business it bought just four years ago, two giant broker-dealer networks, LPL Financial and the recently rechristened Osaic, make intriguing potential buyers, one industry analyst said.

In 2019, Goldman acquired United Capital for $750 million and then renamed it Personal Financial Management. The RIA unit targets high-net-worth clients, but not the ultra-wealthy, who have accounts with $20 million to $50 million and are the typical target client for the giant investment bank.

The financial advisors who work with broker-dealers like LPL Financial and Osaic typically focus on clients who are characterized as mass affluent and have $500,000 to $1 million in money to invest.

The RIA unit has about $29 billion in client assets. A Goldman Sachs spokesperson on Monday confirmed toInvestmentNews in a statement that the bank was “currently evaluating alternatives” for its Personal Financial Management RIA business.

“Some articles have cited (LPL Financial, or LPLA, its ticker symbol) as a potential buyer of the asset, but have also indicated a PE-backed firm such as Advisor Group (now Osaic) may be the more likely acquirer,” Steven Chubak, managing director at Wolfe Research, wrote in a note Monday afternoon.

LPL is a mergers and acquisitions machine, and historically it has executed M&A deals in a price range of six to eight times EBITDA, or earnings before interest taxes depreciation and amortization, Chubak noted. EBITDA is a key metric in evaluating wealth management businesses, particularly RIAs, because of the steady revenues they generate each quarter from client fees.

Under such a scenario, that would imply a purchase price for Personal