RIA Homrich Berg secures $75 million in debt financing



Atlanta-based RIA integrator Homrich Berg, which has about 50 client-facing advisors and manages more than $13 billion in client assets, has completed a loan capital revolver, raising $75 million through to a multi-bank syndication led by First Citizens Bank.

The deal allowed Homrich Berg to retain majority control of the company; in July, the RIA sold a minority stake to New Mountain Strategic Equity, a subsidiary of private equity firm New Mountain Capital, to facilitate ownership succession.

The new funds will be used to accelerate mergers and acquisitions, said Homrich Berg Chairman Thomas Carroll. The company just closed its biggest deal to date, acquiring Oakbridge Partners, a $1.5 billion RIA in Atlanta’s Buckhead neighborhood.

“There are still many innings left in this consolidation trend, with business owners trying to come up with succession plans and having to partner with a bigger company like Homrich Berg,” Carroll said. “Or, in the case of Oakbridge, you had a great business with young business owners, but they got to the point where they were running into scale and capacity issues, and rather than doing it alone, they decided to actually merge with Homrich Berg. This trend is going to continue, so it creates a good opportunity for banks, quite frankly, to lend into the space.

This is the first time in HB’s history that it has entered the banking market. Carroll said the company could have gone to a private lender or raised private equity funds, but the cost of capital was cheaper that way.

“Obviously interest rates have gone up, and the cost of capital has gone up as a result and will likely continue to go up, but it remains, within the overall cap structure, the best form of capital for us at this point. of our growth to take,” he said.

The news does not mean that HB will become an asset aggregator; on the contrary, the company has grown methodically over the past 30 years and will continue to take this more conservative approach, he added. The company has averaged about one deal per year for the past five years, and this new funding could accelerate that to two or three acquisitions per year.

Homrich Berg wanted to be a regional fee-based consulting firm integrator, not an aggregator.

“We believe in an HB customer service model; we believe in an HB investment philosophy and department; we believe in having a technology stack, an operations department. So our goal is to make sure that any target interested in being part of Homrich Berg realizes that we’re going to bring their business into Homrich Berg,” Carroll said. “We see the scale and benefits of taking this integrator approach, and we want to run a consistent business and build it for the long term.”

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