Lightyear Capital (Lightyear), a New York-based private equity firm focused on financial services investing, today announced that
Investment funds affiliated with private equity firm Lightyear Capital and the Public Sector Pension Investment Board (PSP Investments), are to acquire AIG Advisor Group, a subsidiary of American International Group (AIG).
Terms of the transaction, which is subject to customary regulatory and other approvals, have not been disclosed.
Advisor Group is one of the USA’s largest networks of independent financial advisors with more than 5,200 independent advisors and USD160 billion in client assets under administration. Advisor Group provides comprehensive broker-dealer services, technology, and advisory programs through its four registered broker-dealers and Registered Investment Advisors (RIAs): FSC Securities Corporation, Royal Alliance Associates, Inc, SagePoint Financial, Inc, and Woodbury Financial Services, Inc The broker-dealers/RIAs operate within a single network, positioning Advisor Group to provide a best-in-class, industry leading platform.
Investment funds affiliated with Lightyear and PSP Investments will have the majority of the seats on Advisor Group’s Board of Directors. Erica McGinnis will continue in her role as Chief Executive Officer of Advisor Group. Valerie Brown, former Chief Executive Officer of Cetera Financial Group, a portfolio company of Lightyear Fund II, L.P. (“Lightyear Fund II”), will be joining Advisor Group full-time at the closing of the transaction and will serve as Executive Chairman of the Board.
In 2010, Lightyear Fund II acquired three independent broker-dealers from ING which were rebranded as Cetera to build an integrated, standalone firm. Under Lightyear Fund II’s ownership from 2010 to 2014, Cetera became a leading independent broker-dealer/RIA network and grew to approximately 6,600 advisors, up from 4,000 at the time of the acquisition. Additionally, Cetera’s client assets under administration grew to USD148 billion, up from USD75 billion at the time of acquisition. Brown’s management team and Lightyear helped build and optimize the platform to drive asset growth, operational efficiency, and enhanced scale through several strategic acquisitions.
Mark Vassallo, Managing Partner of Lightyear, says: “We see enormous opportunity to grow and expand Advisor Group, and we look forward to working with Valerie Brown and Erica McGinnis, the Advisor Group management team, the PSP Investments team, and the Advisor Group’s high-quality advisor force to grow the company.”
“We are pleased to be acquiring Advisor Group. Lightyear’s commitment to the asset and wealth management sector is substantial and one where we have a deep heritage. We look forward to working with Advisor Group and helping them expand the business,” says Donald B Marron, Chairman and Founder of Lightyear.
“We are pleased with this transaction, which is in line with PSP Investments’ private equity strategy of making sizeable, direct investments in high-quality companies alongside experienced partners. We see multiple growth levers to drive Advisor Group’s future performance and look forward to collaborating with Lightyear and the Advisor Group management team to deliver on that plan,” said Guthrie Stewart, Senior Vice President, Global Head of Private Investments at PSP Investments.
Valerie Brown, incoming Executive Chairman of the Board of Advisor Group, says: “I’m thrilled to work alongside Lightyear Capital’s team again. I am confident Lightyear and PSP Investments will help Advisor Group’s independent advisors thrive in this challenging marketplace. I have known Erica McGinnis for several years and look forward to working with her.”
“This acquisition marks an exciting chapter of growth for Advisor Group. Lightyear and Valerie have proven track records of success in the wealth management space. Together, we plan to grow the business and continue to deliver world-class service to our advisors and their clients,” says Erica McGinnis, Chief Executive Officer of Advisor Group.
