The Valeas stake will in part “help facilitate and fund Sequoia’s existing M&A plans,” the firm said in an emailed statement, with additional funds going to staffing, technology, and services for clients. Sequoia’s organic growth rate has been at about 15% a year, the firm said, with inorganic or acquired growth at 25% a year.
Sequoia Financial Group said Wednesday it has secured commitment for a $200 million minority stake from private equity firm Valeas Capital Partners to drive its expansion both through acquisitions and investment in its mostly employee-owned firm.
The Akron, Ohio-based wealth manager Sequoia has already made strides in acquiring other registered investment advisers (RIAs), contributing to a near doubling of the client assets it oversees from $5.75 billion in March 31, 2021, to $10 billion as of December 31.
“We are delighted to welcome Valeas as a long-term strategic capital partner,” Tom Haught, Sequoia’s founder and CEO, said in a release. “The Valeas investment is further validation of Sequoia’s talented team, significant growth potential, and strategic vision.”
San Francisco-based Valeas called the Sequoia stake its “cornerstone U.S. wealth management investment” in the release. The deal, which is slated to be inked on October 31, comes after New York-based Kudu Investment Management took a minority investment stake in Sequoia in July 2020.
The moves by Valeas and Kudu add to a trend by private equity in recent years to invest in and acquire RIAs. Sequoia has a proven track record of acquisitions in the space, with eight purchases in total, and two with over $1 billion in assets under management last year. In 2021, the firm bought NCA Financial Planners, a Mayfield Heights, Ohio-based firm with $1.7 billion in AUM and Wealthstone Advisors, a Columbus, Ohio-based RIA managing $1.4 billion.
Sequoia was founded in 1991 provides wealth management and financial planning services, including asset management, estate and retirement planning, fiduciary consulting and family wealth.
“It is part of our DNA to invest in our business and team ahead of the curve to achieve superior outcomes for our clients,” Haught said.
Rob Little and Ed Woiteshek, the co-founders of Valeas, started the firm in 2021. They will serve on the Sequoia board of directors after the transaction closes. Kudu chairman Charlie Ruffel will also serve on the board.
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