Stone Point seeks buyer for Kestra Financial

  • Goldman advising on Kestra auction
  • Stone Point acquired Kestra in 2016
  • Stone Point’s Trident VII closed on $5.5 bln in 2017

Stone Point Capital’s sale of Kestra Financial has hit the second round, according to three sources.

Goldman Sachs is advising on the process, the people said.

Established in 1997, Kestra is an independent broker/dealer with about 2,300 affiliated advisers. The Austin company had $76 billion in assets under advisement in 2017 and $24 billion of AUM. Total revenue that year was $475 million.

Who is bidding for Kestra is unclear. Bain Capital looked at the company but is no longer involved, a different person said.

PE has dominated the process, one of the three sources said. “Everyone who bid for Cetera and didn’t win is bidding for this,” the person said.

Cetera Financial Group is a broker-dealer network that was up for sale last summer. The well-publicized auction saw several PE firms vie, including Lightyear Capital, GTCR, Reverence Capital Partners and Lovell Minnick Partners, Buyouts reported. Genstar Capital ended up winning the process in a deal valued at $1.7 billion.

Kestra is a less than three-year hold for Stone Point, which acquired the company in 2016 when it was known as NFP Advisor Services. NFP Corp, the seller, retained a minority stake. NFP is a portfolio company of Madison Dearborn Partners.

Stone Point’s investment came from Trident VI, which raised $4.5 billion in 2014. The PE firm is investing out of Trident VII, which closed on $5.5 billion in 2017.

Stone Point invests in sectors including financial services, health services, asset management and outsourcing and technology. This month, Stone Point sold part of its stake in Sedgwick to Carlyle Group. It last month inked separate buys of Eliassen Group and Rialto Investment.

Stone Point and Kestra could not immediately be reached for comment. Executives for NFP, Goldman and Madison Dearborn declined comment.

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