SAINT PETERSURG, Florida–(BUSINESS WIRE)–Dynasty Financial Partners (“Dynasty”) announced today that the company has closed a minority private fundraising round, adding Abry Partners (“Abry”) and The Charles Schwab Corporation (“Schwab”) as new minority investors. Several of Dynasty’s existing investors and directors have invested additional capital alongside Abry and Schwab. In addition, several companies in the Dynasty network have invested in Dynasty as part of a “stock exchange” program that was launched alongside the round.
Dynasty’s network of clients owns and operates independent RIAs that leverage Dynasty’s integrated technology, services and business solutions, robust turnkey asset management program (TAMP), and capital solutions. This integrated platform model provides a synthetic scale that allows Dynasty-powered RIAs to be independent but not alone.
Dynasty intends to use some of this capital to make significant investments in technology and technology integrations, adding services to its core service offering, further developing its TAMP solutions offering and investment, and the addition of intellectual capital and key talent. The company also plans to invest in the growth of Dynasty Capital Strategies, making new equity investments in its client network and making capital available for inorganic growth. The company will also explore certain business development and mergers and acquisitions opportunities that would accelerate growth, add capabilities and increase margin in various areas of the business. A portion of the investment round will be used to fund secondary transactions to provide liquidity to long-time shareholders and founders of Dynasty.
As previously announced in September this year, Dynasty entered into a $50 million credit facility with RBC Capital Markets, UMB Bank, JP Morgan, Citibank and Goldman Sachs Bank which provides access to additional growth capital.
At the same time as this capital increase, Dynasty acquired minority stakes in many of its RIA clients. Most of these clients received shares of Dynasty in exchange for their shares in a “swap” transaction. As a result, the Dynasty Network is stronger and more aligned than ever, with many network members having a stake in the success of Dynasty and the network.
“After assessing the state of the public markets, our board decided to have a few conversations with potential private investors. Having had the luxury of options and time, there were two requirements that topped my list during the process – partnership and alignment,” said Dynasty President and CEO Shirl Penney. . “I am delighted to say that several companies have viewed the process from the same perspective and I am delighted to welcome Abry and Schwab alongside our already extremely supportive group of investors. I would also like to thank our past investors and new board members who have also invested in the cycle; their unwavering support is inspiring. Finally, I welcome many of our RIA partners as investors in Dynasty and appreciate their commitment to partnership, our community and growing together.
“On behalf of Dynasty’s Board of Directors, I welcome Abry and Schwab as minority investors and look forward to the fresh perspective, industry experience and institutional expertise that Abry will add to the council chamber. Similar to Envestnet’s strategic investment in Dynasty in 2020, we welcome Schwab’s minority investment in Dynasty to further align our commitment to the independent wealth management space,” said Dynasty Chairman Harvey Golub. “We are delighted to be able to deploy this growth capital on behalf of our clients in a broader way. We will look to review government procurement when the time is right for our business. »
In light of the capital increase, Dynasty will file a request to withdraw its registration statement on Form S-1, originally filed with the SEC on January 19, 2022 and subsequently amended.
Abry Partners is a Boston-based private equity firm with over 30 years of industry investing experience, having completed over $90 billion in leveraged transactions. Abry has extensive experience in the financial services and wealth management industry, including recent successful investments in Beacon Pointe and Millennium Trust Company. James Scola, Partner, and Michael Cummings, Director, led the transaction for Abry. As part of the minority investment, James Scola will join Dynasty’s board of directors.
“Looking at the RIA space and the growing ecosystem around it, Dynasty was one of the select brands we’ve been tracking for some time. We are excited to have the opportunity to invest in the leading platform for wealth management technologies and integrated services in the RIA space and look forward to bringing all of Abry’s resources to bear on growth. company and its customers,” said James Scola, partner at Abry. .
Schwab is the custodian of more than half of the $72 billion in assets under advisement in the Dynasty network. Schwab and Dynasty have a long history of bringing complementary strengths to their joint clients with Schwab’s expertise in the independent advisor ecosystem and Dynasty’s industry-leading technology and services platform for business owners’ independent advisors.
“As advocates for independent advisors, we’re excited to invest in a company that shares our values of empowering advisors with the technology, tools and resources they need to build even stronger businesses. We couldn’t be more excited about the continued growth occurring in the RIA ecosystem and are proud to be leaders in the field,” said Bernie Clark, Schwab’s Head of Consulting Services.
Dynasty will continue to develop its relationships with other strategic partners in the space, including other major custodians serving the RIA ecosystem.
“At a time when many space companies are forced to hunker down and play defense, driven by leverage and rising interest rates, Dynasty is well positioned to go on the offensive with fresh and friendly capital, a strong balance sheet and favorable margins. . Despite market volatility, the ‘Independence Era’ continues to see tailwinds as Dynasty positions itself to invest and continue to execute on behalf of its clients and investors,” added Justin Weinkle, Dynasty’s Chief Financial Officer. .
Goldman Sachs & Co. LLC acted as exclusive financial advisor and Sullivan & Cromwell LLP acted as exclusive legal advisor to Dynasty on the transaction.
About Abry Partners
Abry is one of the most experienced and successful industry-focused private equity investment firms in North America. Since its inception in 1989, the firm has completed more than $90 billion in leveraged transactions and other private equity or preferred equity investments. Currently, the firm manages over $5 billion of capital in its active funds. For more information about Abry, please visit www.abry.com.
About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 33.6 million active brokerage accounts, 2.3 million corporate pension plan members, 1.7 million of bank accounts and $7.32 trillion in client assets as of November 30, 2022. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management , custody and financial advice to individual investors and independent investment advisers. Its brokerage subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. (members SIPC, https://www.sipc.org) and their affiliates offer a full range of investment services and products, including a wide selection of mutual funds; financial planning and investment advice; pension plan and equity compensation plan services; referrals to paid independent investment advisers; and custody, operations and trading support for fee-based independent investment advisors through Schwab Advisor Services. Its main banking subsidiary, Charles Schwab Bank, SSB (Member FDIC and Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com. TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.
About Dynasty
Dynasty is a provider of wealth management technology solutions and business services for financial advisory firms primarily focused on high net worth and ultra high net worth clients. Dynasty provides access to a comprehensive platform of software and technology tools, business services, and global investment management capabilities through an open-architecture platform delivered through a suite of proprietary and third-party technologies. Dynasty’s technology, tools, and services provide consulting firms with the independence to launch their business, scale their operations, and grow their businesses – both organically and inorganically – while enabling them to be more focused and better equipped to serve their customers. Dynasty’s platform and offering have won numerous awards in recent years.
For more than a decade, Dynasty has been championing the benefits of independent wealth management for high net worth and ultra high net worth clients and has helped shift assets from traditional brokerage channels to independent wealth management channels. As Dynasty becomes a recognized industry leader, Dynasty has differentiated itself by developing competitive strengths including a deep understanding and strong relationship with its customers, a comprehensive offering of technology services and solutions, the ability to leverage its size and scale to invest, the flexibility and fluidity enabled by a modular technology solution, the entrepreneurial culture and an experienced and committed management team. Dynasty is committed to continually growing its business by facilitating the growth of existing consulting firm clients, onboarding new clients, increasing client use of its broader capabilities, launching additional solutions and achieving additional purchases.
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