Bluespring Wealth, Kestra Financial’s new RIA aggregator, acquired Vector, a $1.1 billion Minneapolis RIA.

Founded in 1993, Vector Wealth Management is a wealth management and financial advisory RIA located in Minneapolis. The $1.1 billion firm was acquired by Bluespring Wealth Partners, as announced Thursday, though terms were not disclosed. Bluespring is a subsidiary of Kestra Financial, an independent broker-dealer. Private equity firm Warburg Pincus acquired majority ownership of Kestra in February 2019.

Bluespring Wealth Partners focuses on the acquisition and servicing of wealth management firms and registered investment advisors. It ensures continuity for clients and the businesses they have built.

PE firms are attracted to the RIA industry for its solid growth, high profit margins, dependable cash flow, and low capital requirements. The RIA industry is also highly fragmented and ripe for consolidation. This accounts for Kestra Financial’s move to set up an RIA aggregator.

Third-quarter of 2019 biggest ever for RIA deals

The trend in RIA mergers and acquisitions gained further momentum in the third quarter of 2019. It built on the strong show in the first half of the year and remained on course for another record year.

After 33 transactions in the second quarter, there were 36 transactions during Q3. It was up from 22 in Q3 a year ago. It was also higher than the 12-month trailing average of 33, according to data from Nuveen/DeVoe RIA Deal Book.

The “unprecedented M&A activity” so far in 2019 was driven by “high valuations, the lure of scale, and a strong stable of thoroughbred acquirers,” said the Deal Book.

Kestra Financial was equally in the thick of all the M&A activity through its RIA aggregator Bluespring.

The Bluespring-Vector deal above was the fourth (and largest) after Bluespring’s formation in July. In August, it acquired Hickory Asset Management and Believeland; it purchased Beacon Financial Group in September.

[Related Story:  Another Day, Another Massive Private Equity Buyout Fund          ]