The deal brings together two of the foremost names that provide investment products and portfolio management technology to advisors.

Private equity player Genstar Capital played a catalytic role in bringing about a merger of platform provider Orion Advisor Solutions with investment manager Brinker Capital. The deal will form an entity with an estimated $40 billion in managed assets. (InvestmentNews)

Merger vs Sale – the “180-degree difference”

According to Orion CEO Eric Clarke, who was speaking to ThinkAdvisor, he had denied industry reports that Orion was putting itself up for sale this year.

Genstar mooted the idea of the merger with Brinker first to Orion and Clarke was immediately excited about the proposal.

“With Brinker’s incredible reputation, we saw so many ways [its] team could augment and be additive to our vision and accelerate our momentum to serve advisors …,” said Clarke. “Our business is always evaluating strategic opportunities, … and now with this [merger with Brinker], the story’s become more interesting with a 180-degree difference.”

The merger adds heft to both parties

The combined company will gain substantial heft in the turnkey asset management platform business. It will be better able to compete in a highly competitive market with players such as Envestnet, SEI, and AssetMark.

Brinker, a turnkey asset management platform, employs 168 investment and service professionals; it has $24.5 billion in assets under management as of June 19.

Orion has on board 2000 advisory firms and has $1 trillion in assets under administration. It employs more than 850 people.

According to Tony Salewski, managing director of Genstar, the deal would be transformational for the wealth technology and TAMP industry.

Genstar to invest in the combined company

Genstar will invest in the combined business, alongside Orion’s existing financial partner, global growth private equity firm TA Associates. TA is the majority owner of Orion since 2015.

“We have extensive experience investing in wealth management and financial technology businesses that show patterns of success, and we believe both Brinker and Orion fit that bill,” said Salewski. “We believe that with our efforts to bring the two firms together, we’ll be able to redefine the wealth management industry and capitalize on the powerful market growth trends favoring the merger of these two industry-leading companies.”

Brinker Capital’s founder, Charles Widger, and other members of Brinker Capital’s management, including Noreen D. Beaman, CEO, will also invest in the combined business, alongside continued investment from Eric Clarke, Orion’s CEO, and the rest of the Orion team.

The terms of the deal, or the size of Genstar’s investment, were not disclosed.

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