NEW YORK (Reuters) - Independent wealth manager HighTower said on Wednesday it had sold a stake to private equity firm Thomas H. Lee Partners.
HighTower said Thomas H. Lee will acquire a “significant stake,” but declined to specify the terms. HighTower, which oversees about $50 billion in client assets, has been expanding by bringing registered investment advisers over to its platform from other top wealth managers.
The HighTower statement quoted Thomas H. Lee Managing Director Ganesh Rao as saying the deal would support HighTower’s goal to be “one of the premier brands within the wealth management industry.”
The deal comes at a time when mounting costs for technology and compliance have squeezed margins at small and mid-sized independent wealth management firms across the industry.
In April, HighTower rival Focus Financial Partners said it sold a majority stake in its business to private equity investors KKR and Stone Point Capital in a deal that valued the firm at around $2 billion.
HighTower Chief Executive Elliot Weissbluth has said in recent years that he has considered taking the company public, but told Reuters in an interview last month that he was not taking any near-term steps toward an IPO.
THL joins two long-term HighTower investors DLB Capital HighTower and Weissbluth, who said they are not selling their stakes. The firm will also invest an additional $100 million of new capital in HighTower after closing.
The deal is expected to close by the end of the first quarter of 2018 pending approval from regulators.
Reporting By Elizabeth Dilts; Editing by David Gregorio