Lightyear Capital and Ontario Teachers Pick up Controlling Stake in RIA Aggregator Allworth Financial

Posted on 10/21/2020


Investment funds affiliated with Lightyear Capital LLC, a New York-based private equity firm focused on financial services, and Ontario Teachers’ Pension Plan Board agreed to acquire wealth management aggregator firm Allworth Financial from private equity funds managed by Parthenon Capital. The senior management team of Allworth will remain significant shareholders as part of this transaction. Financial terms were not disclosed. The transaction is expected to close in the fourth quarter of 2020, subject to customary closing conditions.

Allworth Financial originated in 1993 and is based in Sacramento, California and was founded by Scott Hanson and Pat McClain as Hanson McClain. Revealed on July 26, 2017, Parthenon Capital acquired a controlling stake in Hanson McClain Advisors.

Allworth has completed ten acquisitions, has grown client assets under management from US$ 2.4 billion to approximately US$ 10 billion since 2017. Hanson McClain has completed nine transactions in a roughly three-year span, recently buying Capstone Capital for US$ 100 million in May 2020 and Houston Asset Management for US$ 450 million in April 2020.

Upon closing of the transaction, Allworth will become the fifth investment in wealth management by Lightyear’s affiliated investment funds, including successful realized investments in Cetera, Advisor Group, and Wealth Enhancement Group, as well as a current investment in Cerity Partners. Lightyear also has significant experience investing in companies that leverage technology in marketing to reach consumers, including current investments in Datalot and HealthPlanOne.

Advisors

Davis Polk & Wardwell LLP and Truist Securities, Inc. are serving as advisors to Lightyear and Ontario Teachers’ and Torys LLP is serving as an advisor to Ontario Teachers’.

Kirkland & Ellis LLP, Raymond James and Associates, Inc. and Moelis & Company LLC are serving as advisors to Allworth and Parthenon.

Keywords: Ontario Teachers Pension Plan.

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