Fresh off a round of private equity investment, Pure Financial Advisors has made its first-ever RIA acquisition.
The $3.7bn San Diego, Calif.-based RIA is buying Kaufman Kampe Advisors (KKA), a $170m firm which is headquartered in the Seattle suburb of Mercer Island, Wash.
The transaction is set to close by the end of 2021. Pure’s managing partner, Jason Carver (pictured), did not comment on a specific purchase price but told Citywire the deal with KKA was financed wholly with cash, with a one-year earnout period.
‘We think there’s a big opportunity for us to be acquisitive. I think this is the first of many transactions,’ said Carver. ‘I anticipate this to be the popping of the seal, if you will. There’s just a lot of momentum here.’
Private equity firm Lee Equity Partners took a 40% stake in Pure Financial Advisors in the third quarter of 2021. Serial RIA minority investor Emigrant Partners has a minority stake in Pure, as does RIA investment banker Peter Nesvold; both Emigrant and Nesvold invested in Pure in 2020.
Pure, which is controlled by its management, has historically grown on the back of its marketing machine. The RIA runs retirement planning classes around Southern California and has its own television and radio show on local San Diego stations.
The Lee investment came as part of a concerted push by Pure to also become an RIA acquirer. Shortly after Citywire reported the Lee deal, Pure revealed that it had hired Carver. Carver had previously served as a managing director of M&A at Carson Group, one of the country’s most prolific advisor recruiters and RIA investors.
Carver called Pure’s business model ‘a phenomenal platform for growth.’
Pure’s backers are optimistic the firm’s marketing-driven approach can also help it stand out in a crowded RIA M&A market.
‘I think this is how you differentiate yourself in a crowded market. It’s not by overpaying for businesses. It’s by helping people grow their own business,’ said Emigrant Partners chief executive Karl Heckenberg. ‘I think very few of these acquirers in the market have ever even truly tried to solve for that.’
Kaufman Kampe Advisors is led by chief executive Lori Kaufman and president Valerie Kampe, who are the firm’s sole employees. Both Kaufman and Kampe will join Pure through the transaction.
‘We spoke to numerous potential partners and ultimately felt that Pure Financial best embodies the culture, resourcing, and depth of expertise our clients expect,’ stated Kaufman, who co-founded KKA with Kampe in 2007.
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November 15, 2021 at 11:10PM
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$3.7bn PE-backed Pure Financial Advisors makes its first RIA buy - Citywire USA
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