Mercer Advisors has sold a stake to the Canadian private-equity firm Altas Partners in a deal valuing the registered investment advisor at more than $3 billion.
The deal is expected to raise more than $1 billion in equity. Altas is Mercer’s third PE backer, joining Genstar Capital and Oak Hill Capital, along with more than 300 employees who have an equity stake in the Denver-based RIA.
“We have had an outstanding partnership with Genstar and Oak Hill for many years and chose Altas as our newest strategic investor because they believe in our mission, purpose, and strategy and are committed to support continued investment in capabilities that will allow us to enhance the way we serve our clients,” says Dave Welling, Mercer’s CEO.
Mercer has been using its equity investments to build out its technology platform and service model, including expanding its tax and estate-planning offerings. It has also been adding SRI (socially responsible investing) and ESG (environmental, social, governance) options to its investing offerings.
Welling notes that the 300-plus employee-owners account for more than one-third of Mercer’s total workforce, comprising the highest percentage in the firm’s history.
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“Our strategic investors have supported our vision to expand ownership opportunities to all full-time employees and beyond the common elite and exclusive ‘partners only’ model that is still prevalent in the RIA industry,” Welling says.
Private equity has become a favorite source for capitalizing large RIAs that are looking to continue to grow through acquisitions, an area where Mercer has been among the most active. Mercer, which says it manages around $48 billion in client assets, was the top RIA acquirer in 2022, according to DeVoe & Co.’s annual report on advisor deals. The 19 transactions DeVoe logged for Mercer were well ahead of second-place Wealth Enhancement Group, which did 13 deals in 2022. Mercer says it has completed 75 acquisitions since 2016.
Founded in 1985, Mercer now staffs more than 80 offices throughout the country. Its AUM has nearly tripled from its last private equity round in 2019, when it managed $16.5 billion in assets.
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Steve Puccinelli, managing partner of Oak Hill, one of Mercer’s earlier PE backers, says the firm has “demonstrated consistent performance and continues to have an extensive runway for sustainable, accelerated growth.”
Raymond James worked with Mercer on the financials of the latest equity round. Altas was supported by
in the deal.
