Rumors of an imminent sale of AssetMark, was first raised in Decemberturned out to be true.
AssetMark Financial Holdings Inc. announced Thursday that it agreed to be acquired by private equity firm GTCR.
Shareholders of the asset management platform and technology provider will receive $35.25 per share in cash based on an equity valuation of $2.7 billion, according to a statement prepared by AssetMark. This gives GTCR full ownership of AssetMark, which the firm's board of directors unanimously approved.
Chicago-based GTCR invests in more than 280 companies across multiple industries and sectors. It's also not the firm's first foray into wealth management—it took a 25% stake in Captrust Financial Advisors in 2020. Since then, Captrust has expanded assets by about 83%—pfrom $390 billion in June 2020 to more than $714 billion by August 2023.
In a February interview with WealthManagement.comAssetMark CEO Michael Kim, who joined the firm in 2010, said he saw the opportunity.
“Hybrid was where the ball was going,” he said. “The stand-alone hybrid model, this tremendous secular trend, was just beginning to unfold.”
When he joined the firm, AssetMark was a leader in serving independent broker/dealer advisors.
“At the time, the composition was about 98% IBD-hybrid and 2% RIA advisors; now that has shifted to 70% IBD-hybrid and 30% RIA advisors (working with AssetMark),” he said.
AssetMark, which has approximately $117 billion in platform assets, reported a 14.5% year-over-year increase in its platform assets, which stood at $109.7 billion at the end of January 2024.
Its platform serves over 9,300 financial advisors and over 257,000 investor households (up 5.6% year-over-year since January), according to AssetMark.
The AssetMark platform supports custom portfolio creation, management, advanced analytics, performance reporting and asset custodial services.
In recent years, the firm has added financial planning (acquisition of Voyant), research and marketingamong other technologies, for build an end-to-end platform solution for consulting firms.
Kim said the firm had $60 million in its 2024 capital budget devoted to technology, up from $45 million spent on technology a year earlier.
According to securities filings, the Chinese securities firm Huatai Securities bought a majority stake in the firm for $768 million in 2016eventually owning almost 70% of the company.
Based in California, AssetMark has over 1,000 employees and was founded in 1996.