The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 24 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 2 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Oros: Unlimited custody choice for advisors does not necessarily create value
“Having unlimited choice of where you custody assets doesn't necessarily create value.”
Oros: Private equity institutionalized RIA cottage industry to clients' benefit
“I actually think for the industry, private equity has been overall very good, because it forced an industry that was very cottage, very subscale to run in a much more rigorous way, which I, for one, think is good long-term for clients, because if you're runnin…”
Oros: Hightower always legally enforces restrictive covenants against departing advisors
“We have the occasional advisor who departs and tests those things. And we always protect them because we need to protect the business.”
Oros: Majority of RIAs grow via market lift, not new clients
“The majority of advisors really grow when the market goes up. They struggle to generate net new client growth.”
Oros: Asset managers should pitch Hightower corporate office, not 1,000 advisors
“I would tell you come to the center, meaning come to the corporate teams, the home office, as opposed to trying to go out to a thousand advisors individually, which we still have managers trying to do that. That's just a hard road.”
Oros: Hightower acquired NEPC to centralize investment operations
“We also just made an acquisition of a business called NEPC, one of the largest institutional consultants in the U.S. And we made that acquisition and wanted to have NEPC part of Hightower specifically so we could start to centralize more of the investment oper…”
Oros: Hightower private market allocation will reach 12% to 15% in five years
“We think that number is going to be 12 to 15% over the next three to five years.”
Oros: Large RIA platforms will merge to reach $200B-$300B scale
“You're going to see more meaningful consolidation, including big firms that come together. Because think about if you're a 20,000,000,030 billion dollar AUM RIA, That's a big RIA, but you're still a long ways from a 200,000,000,300 billion dollar firm with rea…”
Oros: Acquirers cannot turn a non-growing RIA into a grower
“No, because we know if there's growth, we can improve it. But what we don't try to do is convince ourselves we can take someone who's not growing and turn them into a grower.”
McCusker: NEPC avoided an auction because Hightower terms were fair
“It just felt wrong to bring in other players at that point, and we felt like having the external advisor validate that the financial terms were reasonable and at market just gave us some comfort that we were only going to screw things up if we brought other pe…”
McCusker: Distributing through Hightower's RIA platform provides scalable growth
“If we can bring solutions to Hightower's RIA platform and have them invest in it, that's a more scalable model than we've been able to create historically.”
McCusker: Next-gen RIA leaders prefer planning over in-house investment management
“They are under allocated to private markets. There's a generational transfer happening within the RIA leadership where you have folks who led their RIAs from an investment perspective, and the next generation wants to be more planning oriented and wants to han…”
McCusker: TH Lee will face another Hightower transaction in a few years
“Hightower is owned by TH Lee. It's been a very successful investment for them. They've rolled it into a continuation fund. That continuation fund has a life on it, and they'll have to figure out something. There will be another transaction a few years from now…”
McCusker: Hightower acquiring 100% of NEPC was a deal-breaker
“A really important part of our culture is having ownership in our business, being really well aligned, and then being able to pass that ownership on to the next generation. So that was a deal killer if they wanted to go 100%.”
Hightower buys 100% of RIA assets but flexes retained economics
“Where we can be quite bespoke is the way we structure the deal from an economic standpoint, meaning we do typically asset purchases. So we're buying a hundred percent of the assets, which in these businesses are mainly the client relationships. Where we can be…”
Hightower rejects RIA sellers wanting to immediately exit
“One, it starts with advisors who still want to continue to work in their business. We're not the place to come. If you just want to sell and go, there are others who would be okay with that. We want you to continue to run your office in most cases.”
Oros: Hightower expects client loss after acquired founder steps down
“So the ending hasn't been written yet, Ted, on this one, but it did force us into some rapid planning, which rarely is good, and we certainly will expect we'll have some client loss as a result, because the individual departing is such a visible part of the te…”
Oros: Hightower portfolios average 5% to 6% allocated to private markets
“Today, on average, across all of Hightower, think of us as five to six percent allocated to privates.”
Oros: Hightower expects at least $100M raised per NEPC private vehicle
“So we're going to roll our first one out the first half of this year with any PC. Our expectation is We're gonna get at least a hundred million dollars of capital raised with each one of these.”
McCusker: NEPC hired an investment banker for market education, not auctioning
“We engaged an investment banker to help us not so much scan the universe and bring in other potential suitors, but just help us understand who are the other players besides Hightower. Where does Hightower fit in terms of how they work with their advisors”
McCusker: All 350+ NEPC employees receive bonuses upon deal close
“We made sure that all of our 350 plus employees are getting something out of this transaction. There's a bonus for every single person who's employed when the transaction closes.”
McCusker: Hightower Has Acquired 140 Advisor Teams
“Hightower has gone through a lot of acquisitions. They've acquired a 140 advisor teams.”