Dynasty Financial Partners will now round out its suite of capital solutions by offering to make minority investments in their client firms. The launch of the minority investment program will allow Dynasty to offer its clients the most comprehensive set of capital solutions to RIAs in the industry.
This new capital program adds to Dynasty’s existing programs offering traditional debt financing as well as non-controlling revenue interests.
New board member Rebecca Zeitels Alcalay provided significant input to the design of such programs and her joining the Board is a recognition of her contributions. In addition, as part of Dynasty’s Diversity and Inclusion initiatives, the company feels that new and different perspectives on how it meets the needs of its clients and employee partners is a competitive advantage in business today.
“As the race for growth and scale quickens within the wealth management space, there is increasing demand from RIAs seeking an equity partner," said Ms. Alcalay.
"I have seen the success of Dynasty’s existing debt and revenue interest programs in providing RIA’s access to capital for succession planning, growth initiatives, operational enhancements and similar initiatives and believe the addition of this new minority investment program will add the final arrow to the quiver. This will make Dynasty’s capital solutions the most comprehensive available in wealth management. When combined with Dynasty’s middle- and back-office services, integrated technology, practice management and general access to best-in-class solutions for RIAs, it makes Dynasty the obvious standout choice as an equity partner."
MINORITY INVESTMENT CAPITAL PROGRAM
In the last year, minority transactions involving RIAs have more than tripled as firms are taking advantage of attractive market valuations and an influx of capital. Minority equity is a valuable capital solution for a variety of strategic needs, including owner liquidity, M&A, and succession. In addition, minority capital can help institutionalize a brand and enhance credibility with clients and advisor recruits alike.
“The advantage of minority equity is that RIAs maintain control and independence while achieving certain strategic objectives. With Dynasty, they are getting capital from a partner – someone they already know and trust. Our minority investment capital program is designed to offer our Network Partner RIAs not only a competitive valuation, but also access to strategic guidance and specialized resources without onerous operational covenants or fixed liabilities,” said Harris Baltch, Head of M&A and Dynasty Capital Strategies.
Dynasty is an experienced RIA capital provider with a strong track record of delivering efficient and tailored capital solutions to its clients. Additionally, Dynasty’s award-winning capabilities to support RIA growth initiatives and strong industry reputation make it an attractive minority capital partner.
The approach is to offer long-term, patient capital without the restrictions typically found in fund-sponsored investments. Consistent with its history of helping advisors become entrepreneurs, Dynasty’s minority investments will have governance rights in-line with a passive investor and will only require approval for significant business matters. Providing capital to RIAs is only one of the many services that Dynasty provides to its partner RIAs, and because capital has historically been provided off of the firm’s own balance sheet it has allowed the alignment to remain that Dynasty works for the RIA principals while the principals and advisors work for their end clients. The combination of these factors makes these capital programs not only the most comprehensive, but also the most flexible available in the market today.
Finally, CEO Shirl Penney:
“Similar to nine years ago when we launched our lending programs for RIAs, or five years ago when we launched the industry’s first revenue purchase option for RIAs, this new program is in response to listening to our clients – our Network of industry-leading RIAs – on what they want and need from their integrated growth partner and platform services provider. Since Dynasty is primarily a FinTech, value-add business services and investment platform provider, it allows us to be more flexible and accommodating in how we use our balance sheet for various capital solutions to meet the needs of our clients. More and more RIA advisors are choosing to have a partner – to be ‘independent but not alone’ – and to access synthetic scale and support in growing their businesses and caring for their clients. Dynasty is proud to be the market-leader in delivering the broadest array of integrated services available to RIAs from one singular partner in the industry today."
