Rise Growth Takes Minority Stake in $4B Krilogy
Rise Growth Partners, the RIA investing company launched last year by former United Capital CEO Joe Duran, has made its third minority investment, taking a stake in Krilogy, a St. Louis-based registered investment advisor with more than $4 billion in client assets.
This latest investment expands Rise Growth’s presence in the Midwest. The RIA also brings a younger advisor base, with an average age of 48. Founder and CEO Kent Skornia has built the firm via his passion for developing young talent through the firm’s Krilogy Advisor Development System.
Founded in 2009 by Skornia, Krilogy is focused on providing holistic wealth management through in-house financial planning, asset management, tax and legal teams.
Over the last 15 years, the firm has made about 21 acquisitions and/or tuck-ins of senior advisors nearing retirement, where they come in and Krilogy matches them up with a younger successor.
“We have a lot of young people who are really hitting their stride in terms of their career,” Skornia said. “We’ve had this unique setup where we develop talent, buy a book of business, match them up and it’s been a wonderful existence.”
Krilogy has had double-digit organic growth, net of the markets, and the firm realized it needed a capital partner to continue growing at the same level, he said. He expects the firm to hit $5 billion in total assets by 2026, and $10 to $15 billion over the next three to five years.
Skornia said his firm will work with Rise Growth to take its M&A strategy to the next level and help recruit more talent.
“They have a really well-designed process for client interactions and client financial planning,” said Terri Kallsen, managing partner at Rise. “What we’re going to do is help them with capital to continue to do that, to hire more younger CFPs that really want to work in a firm and serve clients. We’ll be looking at different outlets across the country to hire more advisors, to help them grow their business and do more of the succession planning. The second thing is, they’ve done a lot of advisory recruiting and tuck-ins. We believe they are an exceptional platform for acquisitions. So while still recruiting individuals, we’ll be helping them with tuck-ins that really benefit from that Midwestern culture, their value system, and want to be a part of a long-term commitment to their clients.”
Krilogy already has an equity participation plan in place, but Kallsen said it’ll be looking to expand that program to more young advisors who want to be part of a larger organization. The firm will likely offer a combination of equity and cash, and those who choose to participate will be converted from 1099 to W-2 employees of the RIA. Acqui-hires or smaller firms that join Krilogy will get the same offer.
Rise Growth did something similar with OnePoint BFG Wealth Partners, one of its other RIA investments, earlier this year.
Duran, who sold his company, United Capital, to Goldman Sachs in 2019, launched Rise Growth last year, with the goal of acquiring roughly 30% stakes in next-generation RIAs with between $1 billion and $7 billion in AUM. In exchange, it will provide growth capital and resources to help the firms become national RIA platforms with $10 billion or more in assets.
Last February, Rise Growth raised more than $250 million in funding from its management team and Charlesbank Capital Partners, the middle-market private equity firm that also backs Lido Advisors. Charlesbank took a majority stake in the company.
The firm has since made two other investments, the first in Bleakley Financial Group, which rebranded in July to OnePoint BFG Wealth Partners and now has about $12 billion, and the second in Grimes & Company, a $5.7 billion fee-only RIA headquartered in Westborough, Mass.
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