- Lightyear lost bid for Cetera Financial summer 2018
- Genstar closed its $1.7 bln buy of Cetera in October
- Lightyear, PSP Investments bought Advisor Group in 2016
Lightyear Capital has put Advisor Group up for sale, three years after buying the broker-dealer, three sources said.
Barclays is advising on the process, one of the sources said. Advisor Group, of Phoenix, is a network of more than 5,000 financial advisers. The company is comprised of four broker-dealers: FSC Securities Corp, Royal Alliance Associates Inc, SagePoint Financial Inc. and Woodbury Financial Services Inc. Advisor Group has more than $200 billion of client assets under administration.
Advisor Group is expected to fetch from $2 billion to $2.5 billion, two of the sources said.
Lightyear and Canada’s Public Sector Pension Investment Board (PSP Investments) acquired Advisor Group in 2016. Financial terms of the deal were not announced. AIG was the seller.
The Advisor Group sale comes just months after Lightyear lost its bid to buy Cetera Financial Group, which ultimately went to Genstar Capital for $1.7 billion. Lightyear was widely expected to win the Cetera auction and planned to combine it with Advisor Group. One of the reasons Lightyear lost the process was because Advisor Group didn’t want to be part of a “big merged group,” Buyout reported.
The Advisor Group process is expected to draw anyone who lost out in the Cetera auction, a banker said.
The Advisor Group sale also comes weeks since Genstar was said to be in talks to buy Lightyear’s stake in Advisor Group. In January, Financial Advisor reported that the San Francisco PE firm was considering paying Lightyear between $1 billion and $1.3 billion for more than 50 percent of Advisor Group. The deal would value Advisor Group at 10x Ebitda, which is what Cetera received, the story said. It’s unclear if Genstar is still in talks for the Advisor Group stake.
Founded in 1988, Genstar invests in middle-market companies. Sectors of interest include financial services, healthcare, industrial technology and software. The firm is marketing its next flagship, which is seeking up to $5 billion, Buyouts reported in January.
Lightyear, of New York, is a financial services-focused private equity firm. The buyout shop invests in payments, insurance and brokerages as well as asset and wealth management. In November, Lightyear’s fourth flagship weighed in at more than $957 million, Buyouts reported.
Executives for PSP, Barclays and Genstar declined comment. Lightyear and Advisor Group could not be reached for comment.
Action Item: For more information, see the Advisor Group website.