Today, after nine months of public speculation, the Atlanta, Georgia-based bank is selling its $50.6-billion multi-boutique asset manager and mutual fund shop to private equity shop Lightyear Capital for up to $265 million, with RidgeWorth employees also taking "significant equity ownership" in the deal. That works to a price of up to 0.524 percent of assets under management, and it falls well within the $250 million to $300 million range reported earlier this year.
The deal is slated to close in the second quarter of next year. Mitchell, Hartley and Bechtel Advisers advised RidgeWorth on the deal, while RBC Capital Markets advised Lightyear. As for legal advice, SMith, Gambrell and Russell advised RidgeWorth and Wilkie Farr & Gallagher advised Lightyear.
Lightyear is no neophyte in the space. This summer it was reportedly one of the bidders for Crestview's Munder Capital. And four years ago Lightyear bought up three ING U.S. independent broker-dealers to create Cetera, which continues to acquire indie B-Ds. Lightyear was even one of the prospective bidders for RidgeWorth outed earlier this year.
RidgeWorth works with six boutique asset managers, five of which (Ceredex Value Advisors, Certium Asset Management, Seix Investment Advisors, Silvant Capital Management, and StableRiver Capital Management) it owns outright and the sixth (Zevenbergern Capital Investments) which RidgeWorth owns a minority stake of. Besides its headquarters in Atlanta, it has major operations in Orlando, Florida and Upper Saddle River, New Jersey. Including the five wholly-owned boutiques, RidgeWorth has about 220 people. And RidgeWorth confirmed that its current leadership (at the top and in the boutiques) is staying put.
Ashi Parikh, CEO and chief investment officer of RidgeWorth, described the deal as "an inflection point which positions RidgeWorth to become a premier independent asset management company."
"We have carefully thought through the transition, so for our clients, it will be business as usual," Parikh stated. "Over the past several years we have made significant enhancements to our operating platform in areas including risk management, compliance, portfolio accounting, and technology infrastructure as well as client support functions."
Donald Marron, chairman of Lightyear and former chairman and CEO of Paine Webber, added that he's "thrilled to partner" with the RidgeWorth team and praised the shop for building "an excellent multi-boutique investment management platform with high-quality infrastructure and distribution."
Check back here for more updates as this story develops.
Company Press Release
RidgeWorth Investments to Become Independent Investment Firm; Employees and Lightyear Capital to Acquire Company
December 11, 2013
Atlanta, GA – Employees of RidgeWorth Investments (“RidgeWorth”) in partnership with Lightyear Capital LLC, a leading financial services private equity firm, have entered into an agreement to acquire RidgeWorth from SunTrust Banks, Inc. (NYSE: STI) for a price of up to $265 million, creating an independent investment firm with significant equity ownership by employees.
RidgeWorth is a leading multi-boutique asset management firm with $50.6 billion in equity and fixed income assets under management as of November 30, 2013. The firm’s roots go back nearly 30 years. Today RidgeWorth’s investment affiliates include five wholly owned boutiques and one minority owned boutique. The current leadership of RidgeWorth and its affiliated boutiques will continue to manage the business and investment strategies.
“We appreciate our long affiliation with SunTrust. By investing in strong, experienced investment talent, creating a diversified investment product offering, and leveraging our effective operating model of affiliated investment boutiques, we have established a great track record of performance and client retention,” says Ashi S. Parikh, RidgeWorth CEO and Chief Investment Officer. “This transaction marks an inflection point which positions RidgeWorth to become a premier independent asset management company. We have carefully thought through the transition, so for our clients, it will be business as usual. Over the past several years we have made significant enhancements to our operating platform in areas including risk management, compliance, portfolio accounting, and technology infrastructure as well as client support functions.
Parikh continued, “We are excited about being able to meet more of our clients’ investment needs through expanded product lines, innovative solution development, and an even greater focus on client and intermediary partner service. We are pleased to partner with Lightyear as they bring deep industry experience while sharing our commitment to client service.”
Donald B. Marron, Chairman of Lightyear Capital, commented, “We are thrilled to partner with Ashi and the team at RidgeWorth to help execute their long-term vision for the company. RidgeWorth has built an excellent multi-boutique investment management platform with high-quality infrastructure and distribution. This provides an opportunity to add new boutiques and introduce new investment strategies over time. We are confident that we can, in conjunction with RidgeWorth management, leverage Lightyear’s considerable experience to accelerate the growth of the company to the benefit of current and future RidgeWorth clients.”
Marron continued, “We are particularly pleased to increase employee ownership in the firm upon close of this transaction. There is a measurable, unifying effect of an ownership mentality and we believe this, combined with the resources Lightyear can bring to bear, creates a very exciting future for RidgeWorth.”
Headquartered in Atlanta, GA with primary offices in Upper Saddle River, NJ and Orlando, FL, RidgeWorth is a multi-boutique asset management firm servicing a growing client base in the U.S. and abroad that includes endowments, foundations, corporations, healthcare organizations, municipalities, public funds, associations, insurance companies, labor unions and high net worth individuals. With roots going back almost three decades, RidgeWorth provides comprehensive investment management services through its mutual fund complex and its network of institutional asset management boutiques. RidgeWorth’s affiliated boutiques feature some of the industry's best portfolio management talent and showcase a broad array of investment styles, each with a well-defined investment approach and all with unwavering commitments to exceptional performance and service. RidgeWorth’s wholly owned boutiques are Ceredex Value Advisors, Certium Asset Management, Seix Investment Advisors, Silvant Capital Management, and StableRiver Capital Management. RidgeWorth also holds a minority ownership in Zevenbergen Capital Investments.
RidgeWorth supports its majority owned investment boutiques in many areas including trading, compliance, technology, accounting, distribution, and marketing. Each boutique is supported in a manner that reflects and respects its unique business model, thereby allowing each to focus on its primary objective – achieving the best possible results for clients.
RidgeWorth also offers clients a family of equity, bond and asset allocation mutual funds designed to meet the varying goals and risk tolerances of individual and institutional investors and effectively leverages its affiliated investment boutiques as the investment adviser to the RidgeWorth Funds. Built on a foundation of relentless investment discipline and tenured portfolio management by seasoned professionals, the RidgeWorth Funds have delivered highly competitive long-term returns relative to industry benchmarks and peer groups.
This transaction is expected to close in the second quarter of 2014.
Mitchell, Hartley and Bechtel Advisers, LLC acted as financial advisors, and Smith, Gambrell and Russell, LLP, provided legal advice to RidgeWorth on the transaction. RBC Capital Markets served as financial advisor and Simpson Thacher & Bartlett LLP and Willkie Farr & Gallagher provided legal advice to Lightyear Capital.
More Information About RidgeWorth Investments
RidgeWorth Investments serves as a holding company that owns interests in six investment boutiques with $50.6 billion of assets under management as of November 30, 2013. RidgeWorth's investment boutiques manage a wide variety of investment disciplines across the fixed income, equity, and asset allocation asset classes. Our boutiques provide investment management services to a growing client base that includes endowments, foundations, corporations, healthcare organizations, municipalities, public funds, associations, insurance companies, labor unions and high net worth individuals. In addition, RidgeWorth serves as the investment adviser to the RidgeWorth Funds mutual fund family. RidgeWorth Investments is a trade name for RidgeWorth Capital Management, Inc., an investment adviser registered with the SEC headquartered in Atlanta, GA. RidgeWorth Funds are distributed by RidgeWorth Distributors LLC, which is not affiliated with the Adviser. For more information about RidgeWorth, visit www.ridgeworth.com.
About Lightyear Capital LLC
Lightyear Capital is a leading private equity firm making primarily control investments in North America-based, middle-market financial services companies. Based in New York, Lightyear, through its three affiliated private equity funds, has raised over $2.5 billion of capital and has completed investments across the financial services spectrum, including asset management, banks, brokerage, financial technology, insurance, and specialty finance. Lightyear brings unique strengths and discipline to its investment process, as well as operating, transaction, and strategic management experience, along with significant contacts and resources beyond capital. The senior team of professionals averages over 25 years of financial services-related experience and includes Chris Casciato, Michael Doppelt, Stewart Gross, Thierry Ho, Donald Marron, and Mark Vassallo. Lightyear is investing in RidgeWorth through its affiliated investment fund, Lightyear Fund III, L.P.
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