Focus gets under way

By Kelly Holman
Posted 08:03 EST, 6, Feb 2006

Focus Financial Partners LLC, a newly formed wealth management advisory firm, plans to announce Monday, Feb. 6, that it has launched operations and received a $35 million investment from Summit Partners.

Summit, which has offices in Boston, Palo Alto, Calif., and London, is investing equity in New York-based Focus and providing it with subordinated debt.

A group of investment advisory firms—Richmond, Va.-based Capital Advisory Group, Cupertino, Calif.-based Founders Financial Network, New York-based Geller Group Ltd. and Providence, R.I.’s StrategicPoint Investment Advisors—also are participating as investors.

The size of the stakes was undisclosed.

Kevin Mohan, a general partner at Summit, said the firm’s investment is predicated upon strong growth in the wealth management industry, as well as the profitable nature of the advisory firms that make up Focus’ investor base. He said Summit’s investment will give it a “significant” stake in Focus. He declined to comment further.

Ruediger Adolf, chief executive of Focus and a former senior executive at American Express Co., said the rationale behind the firm’s formation and its partnership with other financial advisory firms was simple.

“We were looking for a better way to provide advice to wealthy individuals,” he said. “Some of the best firms in this industry can come together and take on the big guys in a way that could never be done.”

Adolf said the investment advisory firms that are partnering with Focus will be paid through fees rather than commissions. In addition, each advisory firm will continue to operate autonomously.

Focus said that, with its affiliates, it is among the top independent wealth management organizations in the U.S.

The firm, which will manage $3.5 billion in assets on behalf of its investor group apart from Summit, will give its clients access to a complete range of wealth management products, from highly liquid investments to alternative investments, according to Adolf.

Focus plans to use capital from Summit’s investment to finance acquisitions of other wealth management businesses.

Vinson & Elkins LLP partner Robert Seber and Weil Gotshal & Manges LLP partner Steven Peck were counsel to Summit. There was no immediate word on Focus’ advisers.