Focus Financial Partners, the NASDAQ-listed, New York-based partnership of independent, fiduciary wealth management firms that has been growing rapidly since it was founded in 2004, has said it is planning to borrow US$800 million to enable it to acquire more wealth management businesses, both within and outside of the U.S.
In a statement posted on Focus Financial's website, the company's chief financial officer, Jim Shanahan, said the company – which has bought a number of overseas advisory businesses in recent years, including, most recently, a Queensland, Australia-based boutique wealth management firm named Aspiri – wanted to "[take] advantage of the favorable credit and interest rate environment to increase our dry powder,"at a time when "our M&A pipeline is at record levels, both in the U.S. and internationally."
He added: "We anticipate that this momentum will continue."
Focus currently has more than 70 partner firms, including outposts in Canada, the UK and Australia in addition to the U.S.
In the year to the end of December 2020, it reported adjusted EBITDA of US$321.8 million on Its turnover in 2020 was US$1.3 billion, on revenue of US$1.36 billion, up 11.7% from the previous year.
In December, with the acquisition of three Australian wealth management firms by one of its existing partner firms, Connectus Wealth Advisers, Focus unveiled what it is calling its "Connectus consortium" business. This is described as a separate unit within the Focus partnership that is designed for "founders and teams" of wealth management companies that, according to Focus, are keen to "continue managing their client relationships and maintaining their boutique cultures while gaining the operational efficiencies of shared services."
Connectus currently is comprised of seven firms: Two in the U.S., one in the UK, and four in Australia.
In the statement announcing Focus Financial's plans to borrow US$800 million to finance more acquisitions, the company said the financial transaction that is being set up to deliver the funds is expected to close in early July, with the proceeds being made available "to pre-fund the transactions [Focus] anticipates closing over the next several quarters."
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