Homrich Berg Announces New Minority Investment Partner TPG Growth

Rhea-AI Summary

Homrich Berg (HB), an Atlanta-based RIA with $18 billion in assets under management, announces a strategic minority investment from TPG Growth, the middle market and growth equity platform of TPG (NASDAQ: TPG). This partnership builds on HB's 2021 minority equity partnership with New Mountain Capital. HB's management team will remain the largest shareholder group, retaining operational control.

The investment aims to expand HB's capabilities, attract top talent, and enhance client services while maintaining its independent, fee-only fiduciary model. TPG Growth's involvement is expected to support HB's vision for growth and client service enhancement. The transaction, terms of which were not disclosed, is anticipated to close in the fourth quarter of 2024.

Positive

• Strategic minority investment from TPG Growth, potentially providing additional resources and expertise
• Management team remains the largest shareholder group, maintaining operational control
• Potential for expanded capabilities and enhanced client services
• Continued support from existing investor New Mountain Capital

Negative

• None.

Insights

Financial Analyst

This strategic minority investment by TPG Growth in Homrich Berg (HB) is a significant development for both companies. HB, with $18 billion in assets under management, stands to benefit from TPG's expertise and resources in the alternative asset management space. The deal, while not disclosing financial terms, likely provides HB with additional capital to fuel its expansion plans and enhance client services.

Key points to consider:

• HB's management team remains the largest shareholder, maintaining operational control and preserving their fiduciary model.
• The partnership with TPG Growth, following the 2021 investment from New Mountain Capital, indicates a trend of private equity interest in the wealth management sector.
• This move could potentially accelerate HB's growth in the Southeast and beyond, possibly through both organic expansion and acquisitions.
• For TPG (NASDAQ: TPG), this investment diversifies their portfolio in the financial services sector, particularly in the growing RIA market.

While the immediate financial impact on TPG may be due to the minority nature of the investment, it positions the company for potential long-term gains in the wealth management industry. Investors should monitor how this partnership influences HB's growth trajectory and TPG's future returns from this sector.

Market Research Analyst

This investment represents a broader trend in the wealth management industry, where larger financial entities are seeking stakes in successful RIAs. The move by TPG Growth into this space signifies:

• Growing attractiveness of the fee-based advisory model in wealth management.
• Potential for consolidation and scaling in the fragmented RIA market.
• Increased competition for high-quality RIA firms, potentially driving up valuations in the sector.

For TPG investors, this deal offers exposure to the stable, recurring revenue streams typical of wealth management firms. It also aligns with the industry shift towards fiduciary, fee-only advisory services. The partnership structure, maintaining HB's operational independence while providing growth capital, is a model that has proven successful in preserving the client-centric culture of RIAs while enabling rapid expansion.

The expected closing in Q4 2024 suggests a lengthy due diligence and regulatory approval process, which is common for transactions in the financial services sector. This timeline gives TPG ample opportunity to plan for integration and growth strategies post-closing.

ATLANTA & SAN FRANCISCO--(BUSINESS WIRE)-- Homrich Berg (“HB” or the “Firm”) proudly announces a new chapter in its 35-year history, with a strategic minority investment from TPG Growth, the middle market and growth equity platform of TPG (NASDAQ: TPG), a leading global alternative asset management firm. Terms of the transaction were not disclosed.

This partnership marks a milestone for the Atlanta-based registered investment adviser (RIA) with $18 billion in assets under management and builds upon the success of HB’s 2021 minority equity partnership with New Mountain Capital (“New Mountain”), which helped fuel HB’s growth and expansion of the client experience, while maintaining its commitment as a fiduciary advisor. HB’s management team will remain the largest shareholder group and New Mountain will remain invested in the Company.

"We are thrilled to welcome TPG Growth as a strategic partner alongside New Mountain," said Homrich Berg President and CEO Thomas Carroll. "Partnering with minority investors who hold a shared vision for the future of the Firm enables us to continue delivering outstanding service and advice within our independent, fee-only fiduciary model. It also allows HB to remain the largest shareholder group, with our management team retaining operational control, ensuring that our mission of being a trusted financial guide for our clients remains intact."

TPG Growth’s investment will enable HB to continue to expand its capabilities, attract top-tier talent, and further enhance its client services.

"Homrich Berg has seen strong organic and inorganic growth over the last several years as it has expanded in the Southeast,” added Jenny Tu, Principal at TPG Growth. “The Firm’s unwavering commitment to client service and a fee-only fiduciary approach is a proven formula for success and we look forward to supporting HB’s vision for enhancing their capabilities and serving even more clients. We have been impressed by Thomas and his team and are proud to partner with them and the team at New Mountain to build on HB’s momentum."

“We thank Thomas and the management team for a successful partnership to date in building one of the Southeast’s leading wealth management firms,” said Robert Mulcare, Managing Director at New Mountain Capital. “Over the last three years, HB has accelerated investments in people and operations for the benefit of its clients, and we are excited about the future alongside TPG Growth,” added Robert Roberts, Managing Director at New Mountain Capital.

This partnership between Homrich Berg and TPG Growth represents not just a financial investment, but a shared commitment to future innovation and excellence. By aligning with a partner that shares its dedication to client service and long-term vision, HB is positioned to further enhance its offerings and remain a trusted leader in the wealth management industry.

Homrich Berg was advised by William Blair’s Investment Banking team and Alston & Bird LLP. TPG Growth was advised by Debevoise & Plimpton LLP. New Mountain was advised by Ropes & Gray LLP. The investment is expected to close in the fourth quarter of 2024.

About Homrich Berg

Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients, including high-net-worth individuals, families, and not-for-profits. Homrich Berg manages over $18 billion for more than 3,600 family relationships nationwide. This document is not a recommendation. For more information, visit www.homrichberg.com.

About TPG

TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $229 billion of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and our unique strategy is driven by collaboration, innovation and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities. For more information, visit www.tpg.com.

About New Mountain Capital

New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit, and net lease investment strategies with approximately $50 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information, visit www.newmountaincapital.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240926725256/en/

Media Contacts:

For Homrich Berg

Haley Rosa

Gregory FCA

610-228-2805

haley@gregoryfca.com

For TPG

Julia Sottosanti

media@tpg.com

For New Mountain

Dana Gorman / Lisa Pham

H/Advisors Abernathy, for New Mountain Capital

(212) 237-5999

dana.gorman@h-advisors.global / lisa.pham@h-advisors.global

Source: Homrich Berg

FAQ

What is the significance of TPG Growth's investment in Homrich Berg?

TPG Growth's investment in Homrich Berg is significant as it provides additional resources and expertise to support HB's expansion of capabilities, talent acquisition, and enhancement of client services while maintaining its independent, fee-only fiduciary model.

How will the TPG (NASDAQ: TPG) investment impact Homrich Berg's management structure?

The investment from TPG Growth will not change Homrich Berg's management structure. HB's management team will remain the largest shareholder group and retain operational control of the company.

When is the TPG Growth investment in Homrich Berg expected to close?

The investment from TPG Growth in Homrich Berg is expected to close in the fourth quarter of 2024.

What is Homrich Berg's current assets under management?

Homrich Berg currently has $18 billion in assets under management.