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Friday, Jul 19, 2024

CUSO, Sorrento Pacific Selling to Private-Equity-Backed New York Company

San Diego-based sister companies CUSO Financial Services LP (CFS) and Sorrento Pacific Financial (SPF) have agreed to be acquired by a newly formed New York-based holding company, Atria Wealth Solutions.

The co-founders of third-party broker dealers CUSO Financial Services L.P. and Sorrento Pacific Financial, president and CEO Valorie Seyfert and chief operating officer Amy Beattie, will continue to lead the partner firms, which will remain locally headquartered.

CFS, which works primarily with credit unions, was founded 20 years ago; SPF, established in 2005, focuses on community banks. Both are registered investment advisers.

“We’ve reached a point where we really needed to take this step,” Seyfert said. “For this company to go to the next level and truly deliver on our promises to all our customers, we needed those resources; we needed to take this step for the company to flourish and be the leading broker-dealer in the country, which has always been our goal: to deliver the best wealth management solutions of any broker-dealer out there,” Seyfert said. “The market is different; there are so many changes in the industry. We need new expertise; we need new resources. Bigger is better.”

Atria will buy out the equity interests of CFS; Seyfert and Beattie will obtain an equity interests in the holding company. Terms of the acquisition, which is expected to close in 60 to 90 days, were not disclosed.

Atria was founded by wealth management executives Doug Ketterer and Eugene Elias, both formerly of Morgan Stanley, and Kevin Beard, previously head of acquisition and recruiting strategy at AIG Advisor Group.

“To be able to do what you need to do for (representatives) and their clients in terms of investing in the business, whether it be in technology or business development, you need resources,” said Ketterer, who will serve as Atria’s CEO. “You need a certain scale.”

Seyfert said while the firms, over the years, have been approached by other companies looking to acquire CFS and SPF, deciding to team up with Atria after 20 years of independence was a matter of timing and of cultural fit.

“We feel advisers need and want a comprehensive solution that focuses on delivering the best tools – interactive, media, communications, investments, all packaged together to deliver out the best possible service to their clients,” Seyfert said. “We need the latest and greatest, and we believe we can build, creatively, a solution that isn’t out there. We think we can take the chaos in the industry and really take advantage of that to be the firm of the future.”

Atria is backed by New York-based Lee Equity Partners LLC, a private equity firm that focuses on middle market companies with growth potential. Financial services companies in which Lee Equity has or is invested include wealth management firm Edelman Financial Group Inc., specialty finance firm Midcap Financial LLC and WealthTrust LLC, a holding company for wealth management firms.

Lee Equity and Atria’s management team worked together to develop the company’s business plan and strategy for more than one year, Ketterer said.

Atria plan to invest in core areas of the business such as technology, support services, process efficiencies and practice management, he said.

CFS and SPF work with more than 200 financial institutions nationwide, which have $30 billion in assets under administration.


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