Hightower Holding, the parent company of Hightower Advisors, is acquiring a majority stake in NEPC, a prominent investment consultant and outsourced CIO that oversees nearly $1.7 trillion in assets.
Although the financial terms remain undisclosed, Hightower CEO Bob Oros clarifies that NEPC will retain an economic interest in the business and continue operating as a separate legal entity.
“They will remain under Hightower Holding, but we have no intention of merging them onto our [Form] ADV like we would with a typical RIA acquisition,” Oros explains, referencing the regulatory filings submitted to the SEC. “We’re not changing their name, nor are we altering their operations. We want them to continue serving their clients in the way they’ve always done.”
NEPC’s client base includes a mix of institutions such as endowments and foundations, as well as ultra-wealthy families—the average net worth of an NEPC private client is approximately $476 million.
Hightower’s typical retail clients fall much lower on the wealth spectrum, but they are increasingly seeking enhanced advisory services, including access to alternative investments, an area in which NEPC excels.
“From an industry perspective, we’re seeing institutional and retail wealth management converge, with increased demand at the retail level. Our clients, primarily individuals and families, are seeking institutional-quality capabilities,” Oros notes. “This is especially evident in private markets, where demand for alternative investment opportunities in the retail space is growing.”
Hightower anticipates the deal will close in January. Following its completion, the combined enterprise, including NEPC’s assets under advisement, will oversee approximately $1.8 trillion in assets and manage $258 billion. As of June, Hightower’s AUM was $156 billion.
Upon closing, NEPC’s Managing Partner Mike Manning will join Hightower’s board of directors.
This acquisition is part of Hightower’s broader strategy to expand internal services available to its advisors, including a large-scale outsourced CIO (OCIO) offering.
“We don’t currently have in-house research capabilities or a defined house view on asset allocation, so these will be new additions for us,” Oros says. “We also don’t have an OCIO in the purest form, so we see this acquisition as a minimal overlap with our existing capabilities.”
Hightower intends to leverage NEPC’s scale, which provides access to a wide range of alternative investment vehicles at favorable pricing. Oros envisions creating “access vehicles” that bundle various alternatives into themed funds, which Hightower advisors can offer to clients with “competitive pricing and top-tier managers.”
“We’ll focus on a theme,” he explains. “It could be credit, for example, and we’ll construct a credit access fund with multiple managers. We’ll then make that vehicle available to Hightower advisors for their clients.”
This move marks a shift from Hightower’s traditional RIA acquisition strategy, but Oros assures that their pipeline remains robust. He also hints at an upcoming acquisition of a firm managing over $1 billion in assets, which will be announced next week.
