Summit Partners is reportedly shopping around its stake in Focus Financial

Oh oh. “Smart money leaves first.”

As a Geller Group employee, Sheldon Geller and Rudy Adolf led us all believe that when Focus achieved “critical mass”, we’d go public, probably in 5 years. That was 6 1/2 years ago. I didn’t believe them then and I refused those incentive units that were no incentives and were units of nothing. I am glad my future wasn’t attached to that scratched anchor. We all know what happened with that Geller transaction. Rumor is that Focus performed no due diligence in that purchase and I think it showed.

“....the advisors, would not realize value from the deal….”

We do both TPA and RIA M&A deals. The above quote describes the experience of most roll-ups. It is hard to see how this trend will change, let alone to sellers receiving enough value to support their retirements. That is the goal of our clients.

How can a potential seller trust the finances of a firm where the owners, who know the financials best, are dropping the investment? Of course, how will the debt be paid?

Let’s also remember that many (most?) roll-up firms have collapsed suddenly.