Lightyear, Ontario Teachers’ buy wealth manager Allworth Financial

Lightyear Capital and Ontario Teachers' Pension Plan Board have agreed to acquire Sacramento-based Allworth Financial, a wealth management, from Parthenon Capital.

Lightyear Capital and Ontario Teachers’ Pension Plan Board have agreed to acquire Sacramento-based Allworth Financial, a wealth management business, from Parthenon Capital. No financial terms were disclosed. The deal is set to close in the fourth quarter of this year.

PRESS RELEASE

NEW YORK & TORONTO–(BUSINESS WIRE)–Investment funds affiliated with Lightyear Capital LLC (“Lightyear”), a New York-based private equity firm focused on financial services, and Ontario Teachers’ Pension Plan Board (“Ontario Teachers’”), Canada’s largest single-profession pension plan, announced today that they have agreed to acquire wealth management firm Allworth Financial (“Allworth” or the “Company”) from private equity funds managed by Parthenon Capital (“Parthenon”). 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.

Founded in 1993 and based in Sacramento, CA, Allworth is a full-service independent investment and financial advisory firm that specializes in retirement planning, investment advising, tax planning and preparation and estate planning for the mass affluent. As one of the fastest growing Registered Investment Advisors in the United States, Allworth has completed ten acquisitions, has grown client assets under management from $2.4 billion to approximately $10 billion since 20171, and has been recognized as a top Registered Investment Advisor by several notable publications including Barron’s, the Financial Times, and Financial Advisor Magazine.

The investment by Lightyear and Ontario Teachers’ will enable Allworth to continue to build its national footprint through systematic acquisitions and multi-channel direct marketing efforts with the goal of becoming one of the premier wealth managers in the United States.

“We are thrilled to be working with Lightyear and Ontario Teachers’ and are looking forward to leveraging their extensive experience in the financial services and wealth management space,” said Scott Hanson, Co-Founder and Senior Partner of Allworth Financial. “We are proud of what we have been able to accomplish to date and believe Lightyear and Ontario Teachers’ will help accelerate our pursuit of becoming a national firm that brings unbiased, straightforward retirement planning guidance to thousands of families.”

“Over the past 27 years we have helped thousands of clients with their retirement planning needs and sought partners who understood the importance of putting clients first,” said Pat McClain, Co-Founder and Senior Partner of Allworth Financial. “Together with Lightyear and Ontario Teachers’, we look forward to the continued expansion of our client-first model across the country.”

“As fiduciaries to over 300,000 active and retired teachers in Ontario, we understand the critical role that Allworth and its advisors play in providing quality financial planning solutions to its clients. We believe the company is an attractive investment given its differentiated and retirement-centric business model as well as industry tailwinds including an aging population and increased demand for professional and holistic wealth planning services. We look forward to supporting management’s long-term value creation and growth aspirations for Allworth,” said Karen Frank, Senior Managing Director, Equities at Ontario Teachers’.

Mark F. Vassallo, Managing Partner of Lightyear, stated: “We believe we have identified another outstanding investment opportunity in wealth management and are very excited to partner with the Allworth team. Allworth has the opportunity to become a national brand name for providing financial advice. This investment is consistent not only with our long-term thesis around the growing need for financial advice, particularly in times of uncertainty, but also with our multiple prior successful investments in the space.”

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.

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.

About Allworth Financial
Allworth Financial (www.AllworthFinancial.com) is an independent investment financial advisory firm that specializes in retirement planning, investment advising, and 401(k) management with a direct approach to financial planning. Allworth Financial delivers long- and short-term investment planning solutions and advice to help clients achieve their goals and plan strategically for retirement. In 2019, Allworth Financial was awarded the National Business Research Institute’s Circle of Excellence award for customer satisfaction.

About Ontario Teachers’
The Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is the administrator of Canada’s largest single-profession pension plan, with C$204.7 billion in net assets (all figures at June 30, 2020 unless noted). It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.5% since the plan’s founding in 1990. Ontario Teachers’ is an independent organization headquartered in Toronto. Its Asia-Pacific regional offices are in Hong Kong and Singapore, and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded as of January 1, 2020, invests and administers the pensions of the province of Ontario’s 329,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

About Lightyear Capital LLC
Founded in 2000, Lightyear is a financial services-focused private equity firm based in New York. Through its affiliated private equity funds, Lightyear makes primarily control investments in North America-based, middle-market companies associated with financial services, including asset management and wealth management, banks and brokerage, commercial and consumer finance, financial technology, healthcare financial services, insurance, and tech-enabled business services. Lightyear brings focus and discipline to its investment process, as well as operating, transaction and strategic management experience, along with significant contacts and resources beyond capital. For more information, please visit www.lycap.com.
1 As of October 2020.