Lightyear Capital and PSP Investments to buy AIG Advisor Group

U.S. private equity firm Lightyear Capital and Public Sector Pension Investment Board (PSP Investments) have agreed to acquire AIG Advisor Group Inc, a subsidiary of American International Group (AIG). No financial terms were disclosed. Headquartered in New York, AIG Advisor Group is a network of independent financial advisors with more than 5,200 independent advisors and US$160 billion in client assets under administration. With the deal, Lightyear and PSP will take the majority of the seats on the company’s board of directors. PSP’s Guthrie Stewart said the Montréal-based pension fund manager sees “multiple growth levers” to drive AIG Advisor Group’s future performance.

PRESS RELEASE

Lightyear Capital and PSP Investments Agree to Acquire AIG Advisor Group, Inc.

January 26, 2016

NEW YORK–(BUSINESS WIRE)–Lightyear Capital LLC (“Lightyear”), a New York-based private equity firm focused on financial services investing, today announced that investment funds affiliated with Lightyear and the Public Sector Pension Investment Board (“PSP Investments”), one of Canada’s largest pension investment managers, have signed a definitive agreement to acquire AIG Advisor Group, Inc. (“Advisor Group”), a subsidiary of American International Group (“AIG”). The transaction is subject to customary regulatory and other approvals. Terms of the transaction were not disclosed.

Advisor Group is one of the nation’s largest networks of independent financial advisors with more than 5,200 independent advisors and $160 billion in client assets under administration. Advisor Group provides comprehensive broker-dealer services, technology, and advisory programs through its four registered broker-dealers and Registered Investment Advisors (“RIAs”): FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint Financial, Inc., and Woodbury Financial Services, Inc. The broker-dealers/RIAs operate within a single network, positioning Advisor Group to provide a best-in-class, industry leading platform.

Investment funds affiliated with Lightyear and PSP Investments will have the majority of the seats on Advisor Group’s Board of Directors. Erica McGinnis will continue in her role as Chief Executive Officer of Advisor Group. Valerie Brown, former Chief Executive Officer of Cetera Financial Group, a portfolio company of Lightyear Fund II, L.P. (“Lightyear Fund II”), will be joining Advisor Group full-time at the closing of the transaction and will serve as Executive Chairman of the Board.

In 2010, Lightyear Fund II acquired three independent broker-dealers from ING which were rebranded as Cetera to build an integrated, standalone firm. Under Lightyear Fund II’s ownership from 2010 to 2014, Cetera became a leading independent broker-dealer/RIA network and grew to approximately 6,600 advisors, up from 4,000 at the time of the acquisition. Additionally, Cetera’s client assets under administration grew to $148 billion, up from $75 billion at the time of acquisition. Brown’s management team and Lightyear helped build and optimize the platform to drive asset growth, operational efficiency, and enhanced scale through several strategic acquisitions.

Mark Vassallo, Managing Partner of Lightyear, said, “We see enormous opportunity to grow and expand Advisor Group, and we look forward to working with Valerie Brown and Erica McGinnis, the Advisor Group management team, the PSP Investments team, and the Advisor Group’s high-quality advisor force to grow the company.”

“We are pleased to be acquiring Advisor Group. Lightyear’s commitment to the asset and wealth management sector is substantial and one where we have a deep heritage. We look forward to working with Advisor Group and helping them expand the business,” added Donald B. Marron, Chairman and Founder of Lightyear.

“We are pleased with this transaction, which is in line with PSP Investments’ private equity strategy of making sizable, direct investments in high-quality companies alongside experienced partners. We see multiple growth levers to drive Advisor Group’s future performance and look forward to collaborating with Lightyear and the Advisor Group management team to deliver on that plan,” said Guthrie Stewart, Senior Vice President, Global Head of Private Investments at PSP Investments.

Valerie Brown, incoming Executive Chairman of the Board of Advisor Group stated, “I’m thrilled to work alongside Lightyear Capital’s team again. I am confident Lightyear and PSP Investments will help Advisor Group’s independent advisors thrive in this challenging marketplace. I have known Erica McGinnis for several years and look forward to working with her.”

“This acquisition marks an exciting chapter of growth for Advisor Group. Lightyear and Valerie have proven track records of success in the wealth management space. Together, we plan to grow the business and continue to deliver world-class service to our advisors and their clients,” said Erica McGinnis, Chief Executive Officer of Advisor Group.

About Lightyear Capital LLC

Lightyear Capital LLC is a financial services-focused private equity firm based in New York. Lightyear, through its three affiliated private equity funds, has raised over $2.5 billion of capital and makes primarily control investments in North America-based, middle-market financial services companies. Lightyear targets investments across the financial services spectrum, including asset management, banks, brokerage, financial technology, insurance, and specialty finance. The firm brings strengths 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.

About PSP Investments

The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investment managers with $112.0 billion of net assets under management as of March 31, 2015. Its team of approximately 600 professionals manages a diversified global portfolio, including public equities, private equity, bonds and other fixed‐income securities, real estate, infrastructure, natural resources, and private debt investments. PSP Investments is a Crown Corporation established to manage employer and employee net contributions since April 1, 2000 to the pension funds of the federal Public Service, the Canadian Forces, and the Royal Canadian Mounted Police, and, since March 1, 2007, of the Reserve Force. PSP Investments’ head office is located in Ottawa, Ontario, and its principal place of business is in Montreìal, Queìbec. In November 2015, it opened its first international office in New York City, USA. For more information about PSP Investments, please visit www.investpsp.ca.

About Advisor Group

Advisor Group, Inc. is the holding company for a network of independent broker-dealers that is among the largest in the United States. The four broker-dealers that comprise Advisor Group – FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint Financial, Inc., and Woodbury Financial Services, Inc. – are Registered Investment Advisors and members of FINRA and SIPC. Advisor Group fosters the spirit of entrepreneurship and independence exemplified by its more than 5,200 independent advisors across the U.S. For more information, please visit www.advisorgroup.com.

Contacts
Sloane & Company
Elliot Sloane, 212-446-1860
esloane@sloanepr.com

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