Hightower CEO says RIA acquisition prices remain reasonable
The market for RIA firms hasn’t cooled so far in the first quarter of 2024, but acquisition prices aren’t yet overheated, says Bob Oros, chairman and CEO of Hightower Advisors.
“We think conditions continue to be very good for doing M&A, but we also have a lot of discipline around what is a good fit for Hightower,” Oros said.
He adds that the market is not constrained either, which is also helping keep prices within reason.
“There’s more net new RIAs being created every year, so consolidation is still a long way from playing out,” said Oros, who struck his first big deal of the year in January with the purchase of Capital Management Group, a financial planning firm overseeing $3.3 billion in assets.
As a private company, Hightower doesn’t disclose financial data, including revenue. At last check, it boasted about 138 advisory businesses in 35 states and the District of Columbia, with AUM totaling about $131 billion.
Despite Oros’ belief that the bidding for small advisory firms has not reached tilt level, he admits that the number of deep-pocketed, private equity-backed bidders has grown and will keep the pots humming for a while. Hightower, for the record, received its first capital infusion of $100 million in 2017 from Thomas H. Lee partners and has been an active acquirer ever since, completing about a dozen deals last year.
“It does seem like there are a lot of RIAs that have like serious professional capital behind them, us included,” he said. “But I think it doesn’t necessarily imply things will get bid up because we all have our own unique approach to it.”
“I think most of us also have good discipline about what we’re willing to pay,” Oros continued. “And we’re not going to overpay for something just because
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