RIA Homrich Berg Secures $75M in Debt Financing

Atlanta-based RIA integrator Homrich Berg, which has about 50 client-facing advisors and manages greater than $13 billion in shopper belongings, has accomplished a debt capital revolver, elevating $75 million by way of a multi-bank syndication led by First Residents Financial institution.

The deal allowed Homrich Berg to keep up majority management of the agency; in July, the RIA bought a minority stake to New Mountain Strategic Fairness, an affiliate of personal fairness agency New Mountain Capital, to facilitate possession succession.

The brand new funds will likely be used to ramp up mergers and acquisitions, stated Homrich Berg President Thomas Carroll. The agency simply closed on its largest deal but, buying Oakbridge Companions, a $1.5 billion RIA in Buckhead, a neighborhood in Atlanta.

“There are nonetheless many innings left on this consolidation pattern, with enterprise house owners looking for succession plans and needing to companion with a bigger agency like Homrich Berg,” Carroll stated. “Or, within the case of Oakbridge, you had an important enterprise with some youthful enterprise house owners, however they only obtained to the purpose the place they had been bucking up towards scale and capability challenges, and slightly than going and doing it on their very own, they determined to successfully merge with Homrich Berg. That pattern goes to proceed, so it creates alternative for banks, fairly frankly, to lend into the house.”

That is the primary time in HB’s historical past that it has gone out to the banking market. Carroll stated the agency might have gone to a personal lender or raised non-public fairness funds, however the price of capital was cheaper this fashion.

“Clearly rates of interest have gone up, and the price of capital has risen because of that and can doubtless proceed to rise, however it’s nonetheless, within the total cap construction, the very best type of capital for us at this stage of our progress to be taking,” he stated.

The information doesn't imply that HB goes to turn out to be an aggregator of belongings; slightly, the agency has grown methodically over the previous 30-plus years and can proceed to take that extra conservative strategy, he added. The agency has averaged about one deal a yr for the final 5 years, and this new financing might quicken that to 2 to a few acquisitions a yr.

Homrich Berg has been intentional about being a regional integrator of fee-only advisory corporations, not an aggregator.

“We imagine in a single HB shopper service mannequin; we imagine in a single HB funding philosophy and division; we imagine in having one tech stack, one operations division. So our focus is to guarantee that any goal that will be excited about changing into a part of Homrich Berg that they notice that we’re going to combine their enterprise into Homrich Berg,” Carroll stated. “We see scale and advantages from taking that integrator strategy, and we wish to run a cohesive enterprise and construct it for the long run.”

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