Captrust Buys $4 Billion RIA Frontier Wealth Management

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Captrust has finalized its first acquisition of 2022, and it’s a big one.

Rush Benton, Captrust’s senior director of strategic growth

Photo Illustration by Barron’s Advisor; Courtesy of Captrust

The Raleigh, N.C.-based firm is buying Frontier Wealth Management, a registered investment advisor based in Kansas City, Mo., with more than $4 billion in client assets and five offices throughout the Midwest.

Rush Benton, Captrust’s senior director of strategic growth, said Frontier had a “terrific team” of advisors and a collaborative culture that should make for a smooth integration now that the deal has closed.

“We’re first and foremost interested in the people,” Benton said in an interview. “They’re just good people who do things the right way. You have to have almost an intangible assessment of what’s it going to be like to work together after the honeymoon.”

Frontier’s entire team of 24 advisors and 22 support staff are expected to join Captrust, including 20 who will join as partners. Captrust typically begins offering employees equity stakes after three years with the company.

Frontier will become the 57th firm to join Captrust since it began acquiring RIAs in 2006.

But with this being the first deal of the year, does that mean Captrust is slowing the pace of acquisitions?

Benton says no, that that’s “really just a function of timing” and that so many transactions are in the process of closing that Captrust could end the year with as many deals in the book as last year: 11.

“We’re not scaling down at all,” Benton said. “At the end of 2022 we’ll look at it and say it was an extremely active year.”

One of those deals involves a firm that Frontier was planning to buy before it pivoted and decided to sell to Captrust. That’s happening more and more, according to Benton. Many of the larger wealth management shops like Frontier that ultimately join Captrust had been acquirers themselves. So in the course of negotiating the deal with Captrust, the selling firm mentions an RIA it had been planning to buy, and Captrust steps in and acquires the firm instead. Those situations can make for an easier acquisition because the would-be buyer that Capturst acquired already conducted much of the vetting process.

“They’re kind of showing up presold,” Benton said.

In the case of Frontier, CEO Nick Blasi said he opted to join Captrust to tap into the back-office support services it offers its advisors, a scale of resources that the company would struggle to develop on its own.

“As I started creating Frontier’s strategic plan for the next three years, I realized that we would need to invest significant time, energy, and capital to build out areas of our business, like cybersecurity, marketing, and investment services, to continue to grow,” Blasi said in a statement. “These are already areas where Captrust has achieved significant scale.”

Benton had high praise for Blasi, who will join Captrust as a partner.

“He’s a real talent in the industry,” Benton said. “He’s a young man who built Frontier into a $4 billion RIA with multiple offices.”

The location of those offices helped sweeten the deal. In addition to the Kansas City headquarters, Frontier has operations in St. Louis, Wichita, Kan., Omaha, Neb., and Denver.

“It’s a geographic footprint that we were a little bit light in,” Benton said.

As with all Captrust deals, the Frontier team will shed its brand to operate under the Captrust name.

Benton explains Captrust’s model as a balance that insists on unified branding but offers the teams it acquires autonomy in how they run their business and their client-service model. The teams receive the benefit of not having to worry about back-office tasks, he says.

“What we do accomplish is a consolidated operating platform, so that means they never have to think about health insurance again,” Benton said. “Or compliance, or technology—you name it—any kind of corporate function, they never have to think about again.”

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