Rise Progress Companions, the RIA investing firm launched final yr by former United Capital CEO Joe Duran, has made its first funding this yr and second since its inception. The agency has taken a minority, non-controlling curiosity in Grimes & Firm, a $5.7 billion fee-only registered funding advisor headquartered in Westborough, Mass.
Grimes was based over 20 years in the past by Tim Grimes and is now run by his son, Kevin Grimes, who serves as CEO and chief funding officer. The 60-person group serves about 3,000 households throughout the nation. The agency leads in funding administration, actively managing customized portfolios on a discretionary foundation. Duran believes that’s an space of development for the longer term, whereas many different companies are shying away from it.
Grimes has by no means made an acquisition; its development has been purely natural, Duran stated. It has expanded considerably by way of the Schwab and Constancy referral applications. However they’re additionally trying to broaden geographically, and Rise Progress will assist construct it right into a nationwide agency, he stated.
Duran added that his agency will assist Grimes add 5 to 6 areas within the subsequent couple of years, buying companies with $1 billion to $3 billion in belongings that shall be absolutely built-in into the RIA’s platform. Grimes is placing all of the Rise Progress capital on its steadiness sheet to assist it achieve this.
“There are quite a lot of these companies which can be $1 billion, $2 billion which can be delivering nice consumer funding options however don’t know find out how to ramp up and develop, so we predict they’d be very keen on becoming a member of a agency that’s aligned with an investment-centric, completely customized bespoke portfolios for purchasers,” Duran stated.
Duran stated he’s been speaking to companies with $1 billion or $2 billion in belongings that weren’t fairly massive sufficient for Rise Progress to again. And plenty of of these companies usually are not keen on becoming a member of the big, nationwide gamers as a result of these companies have already got absolutely priced valuations.
“The actually attention-grabbing companies wish to be a part of constructing the subsequent agency, not simply becoming a member of a agency that’s already nationwide as a result of that’s the place all of the fairness creation occurs,” Duran stated. “Becoming a member of a $6 billion agency and serving to construct a $30 billion agency—they get a a lot bigger voice; they get a seat on the desk; and so they additionally take part within the fairness, which is an enormous a part of doing this.”
“The Rise group instantly understood the scalability of our enterprise, the individuality of our mannequin and our thrilling imaginative and prescient for the longer term,” Grimes stated in a press release. “With their experience and assets, we’ll be positioned to multiply our affect whereas sustaining the collaborative tradition and relationship-driven consumer expertise which have outlined Grimes and its success to this point.”
In September 2023, Duran, who bought his firm, United Capital, to Goldman Sachs in 2019, revealed particulars about his new enterprise. He stated Rise Progress would purchase roughly 30% stakes in next-generation RIAs. In trade, it will present development capital and assets to assist the companies develop into nationwide RIA platforms with $10 billion or extra in belongings.
A few yr in the past, Rise Progress raised greater than $250 million in funding from its administration group and Charlesbank Capital Companions, the middle-market personal fairness agency that additionally backs Lido Advisors. Charlesbank took a majority stake within the new firm.
The corporate introduced its first funding final August, taking a minority stake in Bleakley Monetary Group, a hybrid RIA with almost $10 billion in consumer belongings. Duran stated his agency invested greater than $50 million.
Rise Progress is one of some new companies targeted on taking minority stakes in RIAs. Karl Heckenberg, the previous CEO of Emigrant Companions, launched his personal fairness firm, Constellation Wealth Capital, on the finish of 2023.
Final yr, Jim Dickson, founder and former CEO of Sanctuary Wealth, introduced the launch of Elevation Level, an funding agency he says will take minority stakes in RIAs with $200 million to $3 billion in consumer belongings and assist these companies develop.
