The Cetera Financial Group auction has officially started, three sources said.
First-round bids for the network of broker-dealers were due at the end of this week, two of the sources said. Bids are likely to “spill into next week,” one of the sources said.
Goldman Sachs is advising on the process.
A mix of private equity and strategics were expected to make proposals. Lightyear Capital, the financial-services-focused PE firm that once owned Cetera, is interested, sources said. Lovell Minnick Partners, which has invested in other broker-dealers, is also in the hunt, as well as Reverence Capital Partners and GTCR, sources said.
Ameriprise Financial and LPL Financial were also interested, sources said.
Cetera previously held “informal advance discussions” with possible bidders in March, Buyouts said.
In February, Cetera confirmed it had launched a capital-structure review as it aimed to lower costs and maximize growth. It hired Goldman to help with the review, which includes a possible sale.
Earlier this week, Cetera hired Michael Murray, a top LPL recruiting executive, to lead business development.
Cetera continues to make progress with its capital-structure review, spokesman Joseph Kuo said in a statement.
“We can, and will be, very selective in choosing our path and any partner as part of our long-term plans,” the statement said. “Beyond this, and as a matter of policy, we are not commenting about this process beyond our public disclosures that we have made thus far.”
Cetera is composed of six broker-dealers: Summit Brokerage Services Inc; Cetera Advisors; First Allied; Cetera Advisor Networks; Cetera Financial Specialists and Cetera Financial Institutions. The firms together have nearly 8,000 brokers and financial advisers, InvestmentNews said.
The El Segundo, California, company has ties to PE. Lightyear acquired ING Advisors Network and three of its broker-dealers in 2010. It renamed the business Cetera. Lightyear then sold Cetera in 2014 for $1.15 billion to RCS Capital Corp, Buyouts reported.
Lovell Minnick, for its part, also has links to Cetera. It sold First Allied to RCAP in 2013. First Allied is now part of Cetera.
Two years later, in January 2016, Cetera’s parent, RCS Capital Corp, filed for Chapter 11 bankruptcy protection. RCS emerged from bankruptcy in 2016.
Cetera is currently owned by its former lenders, which include Fortress Investment Group and Carlyle Investment Management, press reports said.
Executives for Goldman, GTCR, Reverence, Carlyle and Lovell declined comment. Lightyear, Fortress, Ameriprise and LPL could not be reached for comment.
Action Item: Contact Cetera CEO Robert Moore at +1 866-489-3100
Photo of meeting with a financial adviser courtesy of Georgijevic/E+/Getty Images