Cary Street Partners is headquartered in Riverfront Plaza in downtown Richmond.
An acquisition-hungry local investment advisory firm is taking on new private equity backing to allow it to offer a payout to some of its previous investors and give it fuel for continued growth.
Cary Street Partners, which has come to manage $10 billion in client assets through a steady series of acquisitions over the years, announced this month a deal for funding from Chicago-based CIVC Partners.
Financial terms of the pending deal were not disclosed, but Cary Street Partners CEO Joe Schmuckler confirmed that it involves giving CIVC a slight majority ownership stake.
“The idea here was this was a growth recapitalization. We continue to grow and build new offices and build new teams,” said Schmuckler, who has led CSP for a decade. “I think it’s the next step in our maturation and our development.”
Among the investors benefiting from the CIVC deal are New York investment banking firm Ducera Partners and Richmond-based Atlantic Union Bank, both of which took a minority stake in CSP in recent years.
Joe Schmuckler
Atlantic Union will be fully relinquishing its CSP stake as a result of the CIVC transaction, while Ducera is selling down only part of its position. Atlantic Union first took a piece of CSP when it sold its in-house investment advisory operations to CSP in 2022.
“We’ve never really had a distribution to investors or provided a serious liquidity option to investors,” Schmuckler said. “We’ve had nothing but loyal investors and nobody has been knocking on the door to exit, but we felt like it was the right thing to do.”
Schmuckler said the new funding from CIVC is specifically targeted at allowing CSP to grow by acquiring both smaller competitors and recruiting teams of advisors from other firms. It has made dozens of such moves over the years, resulting in a footprint of 19 offices in seven states with 170 employees, including 80 advisors.
Schmuckler said the CIVC funding is needed to keep that expansion going.
“We’ve done what we could do ourselves and we got to the point where we needed real capital support,” he said. “What we needed was a partner that had a lot of experience doing M&A, working with firms like us. That needed a capital partner to execute at a more rapid clip.”
CSP began looking for a new investor about a year ago, at a time when the investment advisory industry is seen as a hot sector for private equity firms.
“Private equity has been very active in our space for a number of years,” Schmuckler said. “We’ve seen a lot of really good firms around the country take private equity for the same reasons we have.”
As the CIVC deal awaits regulatory approval, CSP continues to have an active acquisition pipeline. Earlier this year, it acquired Keene & Dorchak in Fort Worth, Texas.
Schmuckler said Florida is fertile ground for deals these days and CSP has an acquisition pending in Sarasota for May.
Despite the out-of-town growth, about 60 percent of the firm’s $10 billion in client assets are in its home state of Virginia. And CSP has no plans to move its headquarters outside of Richmond. It continues to have its local offices downtown in Riverfront Plaza downtown and in Innsbrook.
No leadership changes are planned at CSP as part of CIVC taking a controlling stake, and all advisors are staying on board, Schmuckler said.
Schmuckler, who continues as CEO, recognized giving up majority ownership brings with it new bosses for him to answer to. He said he welcomes that.
“We’ve always felt very accountable, but there’s no question that with having a majority institutional investor at the table we’ll all have to raise our game,” Schmuckler said. “We’ve built a great company. We want to build a greater company and that’s not going to come through a country club mentality.”
Law firms Williams Mullen and Reed Smith served as CSP’s legal counsel in the private equity deal. CIVC was represented by Ropes & Gray. Financial advisors Dalphia Partners and Sherman & Company represented CSP and CIVC, respectively.
Cary Street Partners is headquartered in Riverfront Plaza in downtown Richmond.
An acquisition-hungry local investment advisory firm is taking on new private equity backing to allow it to offer a payout to some of its previous investors and give it fuel for continued growth.
Cary Street Partners, which has come to manage $10 billion in client assets through a steady series of acquisitions over the years, announced this month a deal for funding from Chicago-based CIVC Partners.
Financial terms of the pending deal were not disclosed, but Cary Street Partners CEO Joe Schmuckler confirmed that it involves giving CIVC a slight majority ownership stake.
“The idea here was this was a growth recapitalization. We continue to grow and build new offices and build new teams,” said Schmuckler, who has led CSP for a decade. “I think it’s the next step in our maturation and our development.”
Among the investors benefiting from the CIVC deal are New York investment banking firm Ducera Partners and Richmond-based Atlantic Union Bank, both of which took a minority stake in CSP in recent years.
Joe Schmuckler
Atlantic Union will be fully relinquishing its CSP stake as a result of the CIVC transaction, while Ducera is selling down only part of its position. Atlantic Union first took a piece of CSP when it sold its in-house investment advisory operations to CSP in 2022.
“We’ve never really had a distribution to investors or provided a serious liquidity option to investors,” Schmuckler said. “We’ve had nothing but loyal investors and nobody has been knocking on the door to exit, but we felt like it was the right thing to do.”
Schmuckler said the new funding from CIVC is specifically targeted at allowing CSP to grow by acquiring both smaller competitors and recruiting teams of advisors from other firms. It has made dozens of such moves over the years, resulting in a footprint of 19 offices in seven states with 170 employees, including 80 advisors.
Schmuckler said the CIVC funding is needed to keep that expansion going.
“We’ve done what we could do ourselves and we got to the point where we needed real capital support,” he said. “What we needed was a partner that had a lot of experience doing M&A, working with firms like us. That needed a capital partner to execute at a more rapid clip.”
CSP began looking for a new investor about a year ago, at a time when the investment advisory industry is seen as a hot sector for private equity firms.
“Private equity has been very active in our space for a number of years,” Schmuckler said. “We’ve seen a lot of really good firms around the country take private equity for the same reasons we have.”
As the CIVC deal awaits regulatory approval, CSP continues to have an active acquisition pipeline. Earlier this year, it acquired Keene & Dorchak in Fort Worth, Texas.
Schmuckler said Florida is fertile ground for deals these days and CSP has an acquisition pending in Sarasota for May.
Despite the out-of-town growth, about 60 percent of the firm’s $10 billion in client assets are in its home state of Virginia. And CSP has no plans to move its headquarters outside of Richmond. It continues to have its local offices downtown in Riverfront Plaza downtown and in Innsbrook.
No leadership changes are planned at CSP as part of CIVC taking a controlling stake, and all advisors are staying on board, Schmuckler said.
Schmuckler, who continues as CEO, recognized giving up majority ownership brings with it new bosses for him to answer to. He said he welcomes that.
“We’ve always felt very accountable, but there’s no question that with having a majority institutional investor at the table we’ll all have to raise our game,” Schmuckler said. “We’ve built a great company. We want to build a greater company and that’s not going to come through a country club mentality.”
Law firms Williams Mullen and Reed Smith served as CSP’s legal counsel in the private equity deal. CIVC was represented by Ropes & Gray. Financial advisors Dalphia Partners and Sherman & Company represented CSP and CIVC, respectively.
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