Emigrant Partners, Emigrant Bank’s RIA capital and advisory services arm, has taken a minority stake in Elevation Point, the investment firm launched last year by former Sanctuary Wealth CEO Jim Dickson. Terms of the deal were not disclosed, although the firms said it included growth capital, as well as a “significant” credit line to help Elevation Point make investments.
Dickson announced the launch of Elevation Point last June. The firm takes minority stakes in RIAs with $200 million to $3 billion in client assets. He founded the firm with Mark Penske, the founder and chairman of United Atlantic Capital, a privately-owned financial services holding company. Penske is the son of Roger Penske, the founder of Penske Corp. and a well-known figure in auto racing.
Elevation Point has invested in three RIAs. Emigrant has 20 partner firms, with an average AUM of over $5 billion, including some with diversified business models, including Gerber|Taylor Capital Advisors, a multi-asset class investment management company, and Stratos Wealth Management.
Both Emigrant Partner and Elevation Point have similar business models; both take minority stakes in RIAs. But they’re going after different market segments, said Jenny Souza, CEO and president of Emigrant Partners.
“We both sit shoulder to shoulder with our partner firms, in not only providing capital but also best-in-class strategic support to those firms,” she said. “Emigrant is investing in established RIAs that have a significant degree of scale and infrastructure to support their ongoing independence and growth.”
“Elevation Point’s really investing in a different segment of the market—the breakaway advisor, which is one we find and have always found highly attractive from a growth and diversification perspective,” she said. “We’ve always been intrigued by this breakaway advisor market; we have just not found the right opportunity to dip our toe into the water in the way Jim and his team have presented to us.”
The partnership will allow Elevation Point to expand its suite of services for high-net-worth and ultra-high-net-worth clients. For instance, the firm will be able to plug into some of Emigrant’s family office services, Dickson said.
“If I think about the basics of blocking and tackling—I think we have that covered,” he said. “But as you went into some of the specializations around ultra-high-net-worth wealth solutions, banking, trusts, real estate, private markets, specialty finance—these were all businesses that Emigrant has been in for a really, really long time.”
Emigrant is backed by the Milstein family. In the mid-1980s, the family found success in commercial real estate and later acquired Emigrant Savings Bank. The family businesses, including Emigrant Bank, are led by billionaire Howard Milstein, a third-generation family member. Other Milstein businesses include New York Private Bank & Trust, Emigrant Bank Fine Art Finance, Abacus Finance, Aperture Media Partners, Galatioto Sports Partners and Personal Risk Management Solutions, among others. The Milsteins also runs 8 AM Golf, a collection of brands in the golf industry.
Elevation Point will be able to tap into a lot of those resources, the executives said.
“The breakaway space has matured,” Dickson said. “The size of the teams we’re talking to and speaking with are bigger and faster and stronger than ever. You can’t show up to the marketplace with yesterday’s offering. You’ve got to build tomorrow’s offering, and that’s really what we’re committed to doing together over a really long period of time.”
Elevation Point was initially launched through an oversubscribed funding round from a combination of family office investors and some debt capital. Dickson declined to say how much was raised or which family offices participated, but those investors are not exiting.
“We just have incredible momentum, and because of that momentum, we wanted to get ahead of our growth,” he said. “As I sat down with our board and looked out six, 12 months ahead, it was time to bring in our next significant family to help us support and grow this business.”
Listen to Jim Dickson’s session, “What’s the Next Move? After the Deal is Sealed…” at Wealth Management EDGE, June 10-12 at The Boca Raton Resort. Register now.