An acquisition-hungry downtown investment firm has turned to Richmond’s biggest local bank for its next play in Virginia and its biggest deal ever.
Cary Street Partners is set to acquire the Dixon, Hubard, Feinour & Brown registered investment advisory arm of Atlantic Union Bank.
At closing later this month, Cary Street Partners will absorb DHFB and its $1.6 billion in assets under management. This will give Cary Street Partners $7 billion in assets.
It will also acquire offices in Roanoke, Charlottesville and Arlington, with 22 employees spread across the three outposts.
The deal does not involve Atlantic Union’s largest wealth management division, which remains in place with $6.5 billion in assets under management at the end of the first quarter.
And the agreement with Cary Street Partners does not mean that Atlantic Union is completely detached from these operations. As part of the sale, AUB will take a minority stake in Cary Street Partners and serve on the company’s board of directors.
Although full financial terms of the deal were not disclosed, Joe Schmuckler, CEO of Cary Street Partners, said it was the company’s largest-ever acquisition.
Schmuckler said the purchase was aimed at continuing the company’s growth in Virginia, where more than 60% of its business comes from. It has offices in Abingdon, Fredericksburg, Wytheville and Virginia Beach, in addition to its local outposts in Innsbrook and headquarters in Riverfront Plaza.
“It was an opportunity for us to further cement that and do it with a strong brand as a partner,” Schmuckler said. “The companies they bought are very good companies.”
Atlantic Union built its registered investment advisory subsidiary through several acquisitions beginning in 2016, when it bought Charlottesville-based Old Dominion Capital Management. Then, in 2018, it acquired Outfitter Advisors in Northern Virginia and Roanoke-based Dixon, Hubard, Feinour & Brown.
These purchases were eventually all consolidated under one legal entity, DHFB.
Schmuckler said talks about a deal between the two companies grew out of their longstanding banking relationship.
“We’ve been a client of the bank for quite a long time and started talking to them about their strategy,” Schmuckler said.
Atlantic Union Bank President Maria Tedesco said the bank entered into the agreement after a “thorough analysis of the changing landscape of the RIA industry and customer needs.”
Tedesco noted that Atlantic Union’s wealth management business continues with trust and asset management services, private banking services and financial advice.
“These core businesses remain in place, in fact we are now able to focus our key resources more on growing these businesses which have always been embedded in the bank and are part of our long-term strategy,” he said. she declared.
Schmuckler will not comment on how DHFB will add to Cary Street Partners’ revenue base. Atlantic Union disclosed $2.7 million in registered adviser management fees in the first quarter and $9.9 million in such fees for all of 2021, according to SEC filings.
Schmuckler said the three teams under the DHFB umbrella will soon operate under the Cary Street Partners brand. But he said they would continue to operate with some autonomy, as they have done within the AUB system.
“These companies are culturally unique. We want to enable these teams to maintain the integrity of their business and we want to support them well,” he said.
This is the second acquisition announced by Cary Street Partners this year, following the acquisition in March of National Wealth Management in New Jersey. The company previously acquired another New Jersey company in 2019.
And acquisitions should keep coming, Schmuckler said.
“We have a desire to grow and acquire good businesses,” he said.