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After becoming a 'Zoom' maestro, Bob Oros spurred Hightower Advisors to close a $1-billion deal a week -- surpassing 2019's total in just over a month

CEO Elliot Weissbluth's replacement spent a year doing housekeeping -- then learning digital due diligence under the sword of COVID-19. But now Oros is loaded with fresh Thomas H. Lee capital, and RIAs like doing business with him

Friday, September 4, 2020 – 8:51 PM by Lisa Shidler
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Bob Oros: These were not deals that were almost done and we were just waiting to sign the paperwork.

Brooke's Note: When Hightower was formed, people often referred to it as 'wirehouse lite.' It sought to use tenets of the RIA model but not to go too crazy. It set up fancy branch offices and the advisors generally did plenty of commission-based business. It made pragmatic sense. Evolution. But as the RIA model took hold, it became outmoded and Hightower tried to shift on the fly. It worked enough for the business to lumber on. But a lot has happened the past couple years following a decided shift in leadership, stakeholders, business model and talent. Lisa's report suggests that Hightower‘s step back is now propelling it forward much the the way it was drawn up. What’s more, COVID-19 gave the company cover to do much of the deal-making digitally. Halleluia. 

Hightower Advisors CEO Bob Oros has gone on a tear, leveraging "zoom" video conferencing to land five big RIA deals in 4 weeks and restoring the Chicago rollup to its former M&A glory.

Flush with a dozen new M&A staff and fresh Thomas H. Lee Partners capital, Hightower scored a total of seven mega-RIAs deals so far this year worth $9.8 billion in AUM, following a long period of reorganization and refinancing.  See: Thomas H. Lee Partners reportedly puts Hightower Advisors on the block, but an air of unreality surrounds the timing and premium price following two-year revamp

David Duchesneau tried an internal succession plan before he went to Hightower this summer to get it done externally.

The total compares with four deals worth $8 billion in AUM last year.

Among the four deals, the company had one giant minority-stake deal LourdMurray, with $4.4 billion in AUM. See: New-look Hightower hires Abby Salameh and takes a 'Hurley-style' stake in a $4.8 billion DFA RIA

In all, Hightower reported $75.7 billion of AUA, including $56.7 billion of AUM at the end of July.

"When handed lemons make lemonade and this is lemonade," says Oros, 53. Some deals initiated in 2019 got shelved in the spring of 2020 while advisors focused solely on clients during the COVID-19 pandemic, he notes  

Oros says his firm is still making connections with RIA prospects, but it's largely being done via video conferencing rather than in-person. 

"Make no mistake these were not deals that were almost done and we were just waiting to sign the paperwork. These were deals where we had some meaningful interaction and spent time together, but a lot of confirmatory due diligence and finalization happened as we've been working from home." 

Hightower is gaining momentum because advisors want scale and freedom in a ratio it can provide, says Dave DeVoe, owner of San Francisco-based DeVoe & Co.

"Advisors are willing to give up degrees of freedom for the benefits of scale. Many advisors no longer want to make every decision for their firm."

The real thing

That said, Zoom-like calls were easier to stomach once face-to-face calls were in the memory tank, says Argent Wealth Management's CEO David Duchesneau who inked his Hightower deal at the end of August. Argent has $1.7 billion of AUM.  See: A $1.2-billion RIA, Argent, is born on the Rt. 128 altar as two $600-million-AUM firms -- one in hyper-growth mode by Fidelity referrals -- get hitched

Elliott Weissbluth
Hightower founder Elliot S. Weissbluth moved to chairman for new CEO. 

"I’ve known Bob Oros for a long time. We’d already been in discussions talking about terms of the transaction before COVID-19 hit, and that was a big advantage. We had face-to-face meetings. That made it more palatable when we had to virtual.”

Hightower declined to confirm whether these deals are minority-stake, leveraged buyouts or more traditional majority-stake deals that require more capital and more of a full-on commitment.

But industry experts expressed certainty that the deals are the real Hightower thing. The new Hightower modus operandi is to buy 50% to 70% of a firm, a source assures.

Even when Hightower completes "minority deals," the company traditionally includes an iron-clad agreement to buy the rest of the firm a few years later. 

"The last thing Thomas H. Lee needs is a bunch of minority stakes when trying to get more value out of Hightower as a national brand," the source adds. 


Oros came aboard Hightower in January 2019 and immediately began to reorganize the firm into a deal-making machine. The team had three staffers back then; now it’s up to 13. See: How Hightower's executive shuffle, kicking CEO Elliot Weissbluth upstairs, opens door for new talent and paves way for Thomas Lee-fueled acquisitions splurge

Rudy Adolf
Focus Financial CEO Rudy Adolf laments the impact of high RIA valuations on M&A activity. 

"We've put a lot of effort into building out our team," Oros states.

Founder Elliot S. Weissbluth remains chairman of the board, Oros says. But he's not involved in the day-to-day operations. 

Oros is involved in the deals, and his relationships as former custodian chief at Boston-based Fidelity Investments gives him an advantage says DeVoe. 

"Bob Oros is a great asset of the firm, too. He has lived and breathed the RIA world for 20 years. Advisors connect with him and trust him." 

Duchesneau explains that his decision to sell to Hightower reflects its power and expertise. It can do for his RIA what he tried unsuccessfully to do in-house.

"Three years ago, we hired a consultant. At the end of the day, valuations were changing, and it made it more difficult to make an internal succession plan work. That's when we decided to talk to outside firms."

"I’ve known Bob Oros for a long time. We’d already been in discussions talking about terms of the transaction before COVID-19 hit, and that was a big advantage. We had face-to-face meetings. That made it more palatable when we had to virtual.”

Duchesneau, 60, says he intends to stay on with the business. Neither Duchesneau nor Oros would discuss prices paid for specific firms. 

Pedal to the metal

Focus Financial has been Hightower's big rollup rival for the past 10-plus years. But it throttled down deal-making in the first half of 2020. Most of its eight transactions were done by the RIAs it owns. See: Focus Financial CEO pumps brakes hard on M&A market, waiting for a return to 'normal' -- and buyers of Focus stock bid up price as debt ratio improves 

Focus made 34 transactions -- the most in the industry-- last year.

Asked about Focus CEO Rudy Adolf's recent reference to "insane" RIA valuations, Oros says Hightower has a limit on what it will pay, as well. But Hightower doesn't necessarily evaluate practices in the same way as Focus.

"Every buyer is going to have their own definition of what that [limit] is," he says. "We'll continue to press the gas. Pressing the gas is our strategy, and it isn't a reaction to something."

It's easier to do deals when a rollup justifies valuations to itself, when its debt load is manageable and investors are taking the long view, which Hightower owner, Thomas H. Lee Partners, seems to do.

Winding down?

The Boston-based private equity giant recapitalized Hightower in 2017 and committed an additional $100 million.

Now Thomas H. Lee Partners is seeking $400 million to $600 million to move Hightower Advisors out of an older fund and into a newer one, according to buyoutsinsider.com, which covers private capital. 

Another source told RIABiz that Hightower intends to wind down this fund.  See: Thomas H. Lee Partners reportedly puts Hightower Advisors on the block, but an air of unreality surrounds the timing and premium price following two-year revamp 

The publication states Thomas H. Lee is one of a number of firms seeking these types of secondary transactions. Hightower declined to comment on the news article.

However, a person close to Hightower says Thomas H. Lee is not winding down the fund that contains its Hightower investment. 

Ther bottom line about the partnership with Thomas H. Lee is that its principals are determined to make it work, Oros assures.

"One thing I would say, and it should speak loudly. I expect to have Thomas H. Lee Partners as my partner for years to come. We have a great relationship.

"They've been hugely additive to our business and I think they love this space, and they love this company. Why would anybody want to disrupt a relationship like that? See: Hightower spent at least $100 million to buy the love [and revenues] of its own advisors, a key sign an IPO or sale is taking shape, industry observers say

While deal-making slowed down for a few months because of COVID-19, DeVoe predicts there will be an increase in deals this year involving up to 140 firms from 132 a year ago and that Hightower is poised to get more than its fair share as a big, well-capitalized player that can take technology tasks off an RIA's plate.

"Most of today’s sellers are seeking the benefits of scale. And Hightower’s model delivers a strong value proposition," he says. 

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The former Fidelity RIA chief now runs his formerly largest RIA client, from Chicago, and with Elliot Weissbluth as chairman, 'inorganic' asset and 'evangelist'

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Elliot S. Weissbluth, Hightower Advisors mastermind, cashes out and vacates chairman role as Pershing's ex-CEO Lisa Dolly takes a board seat

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