With cash and grace, Brouwer & Janachowski attracts another $100 million firm by creating a never-say-retirement home for older RIAs
Using Seton Smoke deal as a template, the $1.1 billion RIA adds a firm helmed by a local 68-year-old
4 min read- Brouwer & Janachowski acquired Stanley F. Green LLC, adding $100M in AUM.
- Attraction stems from B&J's 'never-say-retirement' approach for older RIAs.
- Hurley credits B&J's access to capital, talent, and equity structure for M&A success.
Brooke’s Note: In my interview with Stephen Janachowski, he spent as much time asking me about myself and my business as he did talking about his own business. In a world of ear-benders and ear-burners, this was refreshing — and it tells me why he’s able to effect homespun acquisitions. But it also made me understand why he keeps closing deals and expanding his practice. So when he hit the usual points about cultural fit and trust, I believed him.
Brouwer & Janachowski LLC has scooped up another $100-million RIA owned by a principal who is — at least in theory — already past retirement age but who has no plans to stop serving clients.
The $1.1 billion RIA based in Tiburon, Calif., has added Stanley F. Green LLC, a Larkspur, Calif.-based registered investment advisor. Green, 68, is a sole practitioner with an assistant. The two Marin County communities are separated by only a few miles.
Brouwer & Janachowski made some trade press headlines in 2008 when it merged with Seton Smoke Capital Management in Greenbrae, Calif. — a relationship that still thrives five years later. “We’ve retained about all the clients,” says Stephen Janachowski, president and chief executive. See: After more than two years of radio silence, Mark Hurley pings with a stake-taking in an under-the-radar RIA.
After more than two years of radio silence, Mark Hurley pings with a stake-taking in an under-the-radar RIA
Three reasons
Mark Hurley: B&J has access to
a large pool of capital. This
gives it the ability to pay
the other firms’ owners a full
and fair price entirely in cash.
Janachowski says he did not do this latest deal lightly because he knows it involves more than a roll-in of assets.
“It’s not just a financial transaction. You have Stan Green and you have me. Partnerships are harder than marriages.”
Story Timeline
Still, Mark Hurley, chief executive of Fiduciary Network LLC, of which Brouwer & Janachowski is a part, says that partnerships are helped along by solid financial underpinnings and structure — which are present in spades in this deal. See: Mark Hurley drops a new wealth management prognosis on the industry with a zero-sum flavor.
Brouwer & Janachowski gets its rainmaker --the former head of $18-billion Bernstein office -- in a 'grand experiment' to grow from $1.7 billion to $5 billion in AUM
“There are three reasons why B&J has been able to merge in two different firms when most other wealth managers have been unable to complete even a single transaction,” he says. “First, B&J has access to a large pool of capital. This gives it the ability to pay the other firms’ owners a full and fair price entirely in cash. Second, B&J has a deep bench of talented young successor owners and can capitalize on the resulting scalability of the business when it merges in another firm. Finally, B&J has a financing structure in place that allows it successor professionals buy material amounts of equity in the firm. The successor professionals at the firm merging into B&J are able to participate in this mechanism and also become material owners.” See: This generation of advisor aggregators puts the roll-up ghosts to bed, for now.
Grapevine connection
But Janachowski says he also needed to show sensitivity to an issue that is often paramount for RIA owners.
“They have pride,” he says. “These people started the company and they have got relationships with their clients and they need to know that their firm isn’t going to get damaged. They really have to be reassured that there’s a genuine match.” Finding a genuine match, he adds, is a painstaking process because few firms share the same approaches and philosophies. See: What I learned from four failed attempts to find a successor for my $1.5-billion AUA RIA.
Janachowski has made a big, solid
firm by creating a happy home
for old and young alike.
Ironically, this deal came to him not through official channels but through the local grapevine.
“I was talking to my insurance agent, and he said: 'By the way, didn’t you say that you were interested in merging? Someone who is subletting space from me may want to talk.’”
Green says that Brouwer & Janachowski’s reputation preceded it. “I’ve known and admired Brouwer & Janachowski for years and watched them grow and build their reputation,” he says. Schwab Advisor Services is the primary RIA custodian for Brouwer & Janachowski.
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