HighTower to Buy Stake in Billion-Dollar San Francisco RIA
(Corrects to say HighTower is buying a majority stake in the RIA.)
HighTower Advisors is buying a stake in another registered investment advisory firm, continuing its backers’ new strategy of growth through acquisition rather than by recruiting individual brokers.The Chicago-based firm will be a majority owner of Schultz Collins, Inc., a San Francisco-based RIA with seven advisors managing $1 billion for client assets, HighTower said on Tuesday. It did not disclose the price or exact size of its “strategic investment” in the 24-year-old firm, but said it will include cash and equity.
The investment, scheduled to close by year-end, will be the fourth HighTower has made since brokerage veteran Robert “Bob” Oros joined in January to execute a new operational strategy. Private equity firm Thomas H. Lee Partners in January 2017 purchased a majority stake in HighTower, providing capital to purchase existing registered investment advisory firms.
“Shultz Collins is another example of large successful RIAs realizing that to grow their businesses further and maintain their exceptional standard of care, they need a larger partner with a combination of business acceleration services, operational support, capital and community,” Oros said in an email.
Patrick J. Collins, 71, and Kristor J. Lawson, 64, currently have 100% ownership of the RIA, which they founded in 1995 with Dale W. Schultz, 68, in 1995, according to the firm’s March 2019 ADV filing with the Securities and Exchange Commission. In addition to its West Coast office, the firm has advisors in Washington D.C., and Towson, Maryland.
“We are pleased to be joining HighTower, and look forward to utilizing its business consulting, operational support, capital and other services,” Lawson said in a prepared statement.
When HighTower was founded in 2008 by Elliot Weissbluth, he planned to operate it as a national broker/dealer and RIA fueled by experienced wirehouse brokers. He pitched it as an opportunity for them to monetize their practices through a public offering or sale down the road, but the financial crisis and competition from other firms led to a retreat from the strategy and the sale to Thomas H. Lee. Weissbluth continues as chairman of the firm.
HighTower has 107 advisory businesses in 34 states overseeing $59.5 billion in client assets, the company said. Its other acquired interests this year were in Massachusetts-based Lexington Wealth Management, California-based LourdMurray and Tennessee-based Green Square Wealth Management.
HighTower withdrew from the Protocol for Broker Recruiting in May, saying the pact that makes it easier for advisors to join other firms and that lowers legal costs for firms was no longer relevant to its business model.