AlTi Tiedemann Global Announces Acquisition of East End Advisors Following Strategic Investment
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Insights
The acquisition of East End Advisors by AlTi Global, Inc. represents a significant move in the wealth management industry, particularly in the ultra-high-net-worth (UHNW) segment. This transaction aligns with the broader trend of consolidation in the financial services sector, where firms seek to achieve economies of scale, expand their client base and enhance their service offerings.
From a market perspective, AlTi's strategy to become a leading global independent wealth management platform is indicative of the growing demand for specialized services tailored to UHNW individuals and families. The UHNW market is characterized by clients with unique and complex financial needs, often requiring bespoke investment solutions and a higher level of personalized service. The addition of East End Advisors not only broadens AlTi's geographical footprint but also enhances its capabilities in the Outsourced Chief Investment Officer (OCIO) market, which is becoming increasingly relevant as more institutions and wealthy families seek to outsource investment management functions.
The financial terms of the deal, including the initial purchase price of $76 million and additional contingent consideration based on EBITDA, suggest AlTi's confidence in East End's ability to contribute positively to its earnings. The use of contingent consideration also aligns the interests of both parties post-acquisition, ensuring that East End continues to perform at a high level.
AlTi's acquisition of East End Advisors for an initial $76 million, with additional EBITDA-based contingent consideration, reflects a strategic investment in the UHNW wealth management space. The financing of this acquisition through the investment from Constellation Wealth Capital indicates a robust backing and a belief in the growth potential of AlTi's business model.
The UHNW segment is known for its low volatility and steady fee-based revenue, which can provide stability to AlTi's earnings profile. The acquisition is expected to contribute to AlTi's topline momentum and margin expansion due to East End's strong investment record and seasoned team. However, the integration of the two entities will be important to realize cost synergies and maintain the high client retention rates that both firms currently enjoy.
For investors, the key metrics to watch post-acquisition would be the growth in assets under management (AUM), the synergy realization rate and client retention figures. The deal's structure, with a portion of the consideration being potentially paid in Class A Common Stock, could dilute existing shareholders but also aligns long-term interests between the acquiring and acquired entities.
The legal aspects of the acquisition, with advisors such as Oppenheimer & Co. Inc. and Wachtell, Lipton, Rosen & Katz involved, indicate a high level of due diligence and structuring expertise. The transaction's structure, with both cash and potential stock considerations, requires careful navigation of securities laws and regulations.
Furthermore, the contingent consideration based on EBITDA metrics introduces a performance-based element to the deal, which is common in mergers and acquisitions to mitigate risk for the buyer. It also necessitates ongoing financial scrutiny and potential adjustments post-closing, which could introduce complexity in reporting and operations.
The transaction is subject to customary closing conditions and given the regulatory environment surrounding financial institutions, regulatory approvals will be a key factor in the timely completion of the deal. Any delays or issues in obtaining these approvals could impact the expected benefits and timeline of the acquisition.
Executes AlTi’s strategy to expand scale and reach of its ultra-high-net-worth (“UHNW”) wealth management and strategic alternatives business in existing and new markets.
Deepens presence in attractive
This follows the recently announced strategic investment in AlTi of up to
Headquartered in
East End’s clients will benefit from access to a broader set of investment strategies, as well as AlTi’s global resources and holistic wealth management solutions while preserving the firm’s defining characteristics as an independent investment advisor and leading OCIO under a continuation of East End’s leadership team.
Michael Tiedemann, Chief Executive Officer of AlTi Tiedemann Global, said:
“We have long admired the exceptional team at East End, their investment approach, and the long-standing and trusted relationships they have with their clients. We both share industry-leading client retention and a deep understanding of the complexities and changing demands of ultra-high-net-worth families and foundations. We are excited to have them join the AlTi ecosystem.
“AlTi Tiedemann Global continues to build its reputation as destination of choice for global UHNW families and foundations looking for access to world-class expertise and solutions, combined with the focused attention of a bespoke family office. I look forward to providing further updates on our strategic growth trajectory in the coming months.”
David Salomon, President of East End Advisors, said:
“We are excited to continue on our path of best-in-class client service, while broadening our solution set to meet the complex needs of the families, endowments and foundations we serve. Joining AlTi will further increase our ability to support clients for generations to come.
“We are confident that AlTi's global platform will benefit East End’s clients through increased access to global perspectives and solutions, and that together we will be able to provide a broader range of compelling ideas and opportunities.”
Andrew Douglass, Co-Head of Business Development Strategy for AlTi Tiedemann Global, said:
“The addition of East End helps expand our market presence in key regions in the US and accelerates our ability to grow strategically while maintaining a boutique approach. We have known the East End team for decades and are highly impressed with the business they have built. We are delighted they have decided to team with us.”
Transaction Details
AlTi is acquiring East End Advisors for an initial purchase price of approximately
Advisors
Oppenheimer & Co. Inc. is serving as AlTi’s financial advisor. Houlihan Lokey, Inc. is serving as AlTi’s financial and tax diligence advisor.
About AlTi
AlTi is a leading independent global wealth and alternatives manager providing entrepreneurs, multi-generational families, institutions, and emerging next-generation leaders with fiduciary capabilities as well as alternative investment strategies and advisory services. AlTi’s comprehensive offering is underscored by a commitment to impact or values-aligned investing and generating a net positive impact through its business activities. The firm currently manages or advises on over
Forward-Looking Statements
Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. Words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions identify forward-looking statements. Forward-looking statements reflect management’s current plans, estimates and expectations and are inherently uncertain. The inclusion of any forward-looking information in this press release should not be regarded as a representation that the future plans, estimates or expectations contemplated will be achieved. Forward-looking statements are subject to various risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, global and domestic market and business conditions, successful execution of business and growth strategies and regulatory factors relevant to our business, as well as assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity and the risks and uncertainties described in greater detail under “Risk Factors” included in AlTi Global's registration statement on Form 10-K filed March 22, 2024, and in the subsequent reports filed with the Securities and Exchange Commission, as such factors may be updated from time to time. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240330424226/en/
Investor Relations:
Lily Arteaga, Head of Investor Relations
investor@alti-global.com
Media Relations:
Alex Jorgensen, pro-alti@prosek.com
Source: AlTi Global, Inc.
FAQ
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