Hightower has agreed to acquire a majority interest in NEPC, an institutional consulting firm and chief investment officer (OCIO). The deal will bring institutional research and investment capabilities to Hightower Advisors.
With the addition of NEPC, Hightower and its affiliates will represent over $1.8 trillion in assets under advisement and $258 billion in assets under management.
“As more private wealth investors express interest in distributions for private market investments, NEPC's research and institutional investment capabilities will strengthen Hightower's existing suite of wealth management solutions for advisors and their clients,” Hightower said in a statement. “With this transaction, NEPC clients will continue to receive investment advisory and OCIO services while creating a new growth channel in partnership with Hightower.”
The deal gives Hightower Advisors access to NEPC's OCIO services and private market institutional fund managers.
This also creates a new growth market for NEPC in private wealth. The company will be able to expand its investment products in this segment and invest back into the business. The partnership with Hightower also enhances its investment research capabilities and infrastructure, as well as its ability to attract and retain top talent.
“Our relationship with NEPC stemmed from the exciting and distinctive opportunity the two businesses can offer the private wealth market when combined,” Hightower Holding chairman and CEO Bob Oros said in a statement. “In partnership with NEPC, Hightower's advisor practices will have expanded access to investment management solutions, research capabilities and a range of compelling investment opportunities.”
Hightower expects to keep NEPC's executive team and investment process intact. Once the deal closes, NEPC Managing Partner Mike Manning will join Hightower's board of directors.
NEPC, originally known as New England Pension Consultants, was founded in 1986 by Chairman Emeritus Richard Charlton. The firm is employee-owned and has more than 360 employees.
This follows last month's news that Hightower took a stake in Charles D. Hyman & Companyan RIA in Ponte Vedra Beach, Fla., with $2.3 billion in client assets.
Hightower is owned by private equity firm Thomas H. Lee Partners; in May, WealthManagement.com reported that the private equity firm took Hightower off the market because did not receive the award according to sources close to the firm and the investment bankers involved, it was sought after by potential buyers.
in April, Hightower named Gurinder Ahluwaliathe principal director of the firm's board of directors, as president, a newly created position. Ahluwalia is an executive partner in THL's financial technology and services vertical.
Over the past few years, many in the RIA business have concerted efforts to serve the institutional market. For example, one of the nation's largest RIAs, Mariner Wealth Advisors, acquired two institutional consulting firms, AndCo Consulting and Fourth Street Performance Partnersin early February, adding $104 billion in assets and 100 employees.