Private Equity is Scooping Up RIAs
RIAs lookout, you may be about to be bid on by a private equity firm. The private equity industry, flush with cash it needs to invest, is growing increasingly interested in RIAs. Proven operators are considered the most attractive, and there have been many investments lately. Not all the deals are full buyouts, some are just capital injections in exchange for large portions of equity. The cash influxes are often very helpful for RIAs, but the issue can be that private equity firms need to realize returns within 3-7 years, which means they may need to sell the company altogether or bring in another PE firm, which has risks.
FINSUM : There can be a lot of upside to bringing in a PE investor, but the obvious downside is loss of control, which can be a major issue for RIAs since many have been tightly controlled for several years.
- private equity
- cash injection