Hightower, a Chicago-based investment advisory firm, has acquired Los Angeles-based Bel Air Investment Advisors in what the firm described as the largest acquisition in its 12-year history.
Bel Air has $8 billion of assets under management, while most of the firms that Hightower has acquired have had between $1 billion and $2 billion AUM, and the next largest was $4 billion, said Bob Oros, Hightower’s chief executive officer.
Bel Air's assets under management include $2.8 billion of municipal debt, according to a Hightower spokeswoman.
Hightower, which has 800 employees nationally, has been on an aggressive acquisition path acquiring 14 registered investment advisor firms, including Bel Air, since early 2019.
“We have a team of 15 people, who focus on nothing but acquisitions,” Oros said. “We have capital to infuse and we have made it a core discipline.”
Similarity in value systems, as opposed to geography, drives Hightower’s growth, said Oros, adding that Hightower already had a strong presence in California.
The firms began work on the deal four months ago, and the current economic uncertainty was not a factor in moving forward, Oros said.
“When we had an opportunity to get involved with a high quality firm like Bel Air, it would take a lot for it to not be a good time,” Oros said. “They have continued to run their firm successfully during good times and times of high volatility. There was never a question in our minds around timing.”
A Hightower spokeswoman declined to disclose how much of the $61.6 billion of assets Hightower has under management are in municipal bonds.
Bel Air will continue to run its business independently, with Hightower providing back office services, Oros said.
Hightower acquired Bel Air from Montreal-based Fiera Capital Corporation, which had purchased Bel Air in 2013. RBC Capital Markets and Stifel GMP served as financial advisors to Fiera Capital on the transaction while also assisting Bel Air management in structuring the Hightower partnership.
The Los Angeles-based RIA no longer fit the Canadian company’s business model and it had begun to search for a buyer, Todd Morgan, Bel Air’s chairman, said in an interview.
“It was a friendly split,” Morgan said. “I don’t think wealth management was the best fit for them.”
Bel Air provides customized wealth management services and investment solutions to ultra-high net worth individuals, families, trusts and foundations with $20 million or more in investable assets.
"Bel Air is a successful, multi-generational wealth management business led by a group of highly talented and experienced advisors," Oros said.
The firms signed definitive documents on Dec. 31, and the transaction is expected to formally close in first quarter 2021, Oros said.
"We are excited to have Hightower as our strategic partner," David Sadkin, Bel Air’s president, said in a statement. "Joining Hightower will enable us to continue to operate and build our platform while leveraging the firm's strategic advice, scale, technology, and infrastructure.”
Founded in 1997, Bel Air has 43 employees, 10 of whom are financial advisors. Bel Air's move to Hightower, a privately held company, returns the firm to private ownership, with Bel Air's founders and leaders in key roles with equity in the company.
Morgan began his career at Goldman, Sachs & Co. in Los Angeles. After co-founding Bel Air, he oversaw the growth of the firm to one of the nation's largest independent advisory businesses for the ultra-high net worth segment of the private wealth market.
"Hightower shares our philosophy of placing clients' interests first and providing them with comprehensive, transparent advice," Morgan said. "As we grow Bel Air, we will look to share our culture and vision and continue to grow our presence in California and across the country, and welcome Hightower's commitment to invest the resources needed to expand the Bel Air platform."
