Strategics take lead in AssetMark auction after PE comes in low: sources

Private equity is no longer in the running to buy AssetMark Inc, three sources familiar with the situation said.

Final bids for AssetMark were due March 14, sources said. The private equity firms that submitted final bids include Advent International Corp, which teamed up with Lovell Minnick Partners LLC, to make an offer for AssetMark, two of the sources said. Other PE firms that made offers include Kelso & Company and Permira, the two sources said. Strategics, two backed by international financial institutions and one based in the United States, also made final bids, the two sources said.

Proposals from private equity firms were “meaningfully lower” than the strategics in the AssetMark auction, one of the three sources said. Genstar Capital and Aquiline Capital Partners LLC, who own AssetMark, are now focusing on the offers from the strategics and will decide on a winner “soon,” all of the sources said.

“Private equity is out,” a second source, one of the three, said.

Proposals from private equity firms came in near $700 million, while strategics offered north of that amount, the first source said.

Genstar and Aquiline put AssetMark, which produces $60 million of EBITDA, up for sale earlier this year, Buyouts Insider has reported. Moelis & Company and Raymond James are advising on the process.

Concord, California-based AssetMark provides investment and consulting services for independent advisors. AssetMark, including its Savos and Aris divisions, has about $28.5 billion in combined assets on its platforms.

For Lovell Minnick, the deal represents an attempt by the financial services focused-PE firm to buy back AssetMark. Lovell Minnick invested in the company when it was known as AssetMark Investment Services Inc in 2000. The PE firm sold AssetMark in 2006 to Genworth Financial.

Executives for Aquiline, Genstar, AssetMark, Advent, Lovell Minnick and Moelis declined comment. Raymond James and Kelso could not be reached for comment.

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Correction: A prior version of this story said that AssetMark, along with affiliate Aris Wealth Services Inc, had $28.5 billion in combined assets. Aris Wealth Services no longer exists. The story has been changed.

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