AssetMark auction hits second round: sources

Private equity is dominating the auction of AssetMark Inc, which has hit the second round, five sources said.

Moelis & Company and Raymond James are advising on the process, three of the sources said. Genstar Capital and Aquiline Capital Partners LLC own AssetMark, which produces $60 million of EBITDA. AssetMark is expected to fetch bids of $650 million or more, two of sources said.

Some proposals have already been rejected, the sources said. One party which offered $650 million is out of the process, one of the sources, a banker, said.

While corporates are involved in the process, many PE firms, especially those with a financial services focus, have looked at AssetMark, two of the sources said. They include Advent International CorpCarlyle GroupGTCR LLCHellman & Friedman LLC, Lightyear Capital, TA Associates LP, and Warburg Pincus LLC, sources said. It’s unclear which firms made it to the second round.

“Every single firm that does asset management has looked at [AssetMark],” said a second banking source.

“AssetMark is one of the best properties in the market,” a third banker added.

Concord, California-based AssetMark provides investment and consulting services for independent advisors. AssetMark, along with affiliate Aris Wealth Services Inc, had $28.5 billion in combined assets on various platforms, a company spokesman said.

AssetMark is a short hold for its private equity owners. Aquiline and Genstar closed their $412.5 million buy of Genworth Wealth Management in September 2013. The deal included about $255 million in debt, according to a report from Moody’s Investors Service. The company was renamed AssetMark in November 2013. (Lovell Minnick Partners sold AssetMark to Genworth in 2006 for $230 million.)

Aquiline used its second fund to invest in AssetMarket, the firm’s website said. Aquiline Financial Services Fund II LP collected $742 million in 2011, Buyouts previously reported. The financial services-focused private equity firm has been marketing for its third fund, which has a $1 billion target, Buyouts reported in October 2014. Aquiline Financial Services Fund III LP collected $930.8 million in October, according to an SEC filing.

Aquiline’s second fund produced a 14.2 percent IRR and a 1.36 total value multiple as of September 30, according to the Oregon Public Employees Retirement Fund, an investor in the fund.

It’s unclear which fund Genstar used to invest in AssetMark. In August, Genstar closed its seventh fund at $2 billion, exceeding its $1.5 billion target. The firm raised about $1 billion with its sixth fund in 2012, Buyouts reported. Fund VI produced a 28.25 percent net IRR as of December 31, 2014, data provider Bison said.

Dow Jones reported news of the AssetMark auction earlier this month.

Executives for AssetMark, Aquiline, Genstar, Hellman, Carlyle, Lightyear, Moelis and Advent declined comment.

Action Item: AssetMark can be reached at 800-822-4227

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This story was updated after publication