• Financial services investor sought exposure to hybrid wealth management
• GCG has reputation as an astute acquirer
• PE firm believes its advisory experience will help expansion

While M&A activity in the registered investment advisory (RIA) space has been robust for more than a decade, BharCap believes its GCG Advisors investment stakes a spot in the early days of a nascent market with much promise, said Ethan Wang, co-founder and partner.

Greenwich, Connecticut-headquartered BharCap had a couple of investment management firms in its portfolio but wanted some exposure to the hybrid wealth management space, in which advisories offer a fee-based RIA practice along with a commission-based broker-dealer business.

“We think the hybrid wealth space is still in the early innings of consolidation,” Wang said. “With the right leadership and capital structure, platforms like GCG can become national players.”

The two sides reached an agreement for BharCap to recapitalize GCG with a majority stake in a transaction with previous backer LNC Partners, announced on 10 September. Terms were not disclosed, but GCG management retained a significant minority position and board rights, the executives said.

The private equity firm learned through industry sources in 2H24 that GCG Advisors was running a sale auction with Houlihan Lokey, a firm BharCap principals knew well, Wang said.

Houlihan facilitated an introduction with Joel Burris, founder, president and managing partner for GCG, a hybrid wealth management platform with an M&A strategy based on succession offerings for advisors looking to retire, Wang said.

“We asked to get into the process, met Joel, met the team, and just hit it off, honestly,” Wang said.

‘Quick studies’ in subsector

Charlotte, North Carolina-based GCG took about 20 meetings with potential acquirers into 1H25, then followed up with “a handful of folks we felt really comfortable with,” Burris said.

Talks with BharCap intensified at the beginning of the summer of 2025, and GCG’s management immediately sensed alignment, Burris said.

“They were quick studies – they were familiar with our model,” he said. “We didn’t have to spend a lot of time talking about how we generate revenue, so we got to spend time talking about how were going to generate more, how we’re going to expand.”

BharCap appreciated GCG’s experience expanding in the space under its previous backer, LNC Partners. The advisory bought three firms and an advisory team with LNC backing, according to GCG’s website.

“They’ve done historical acquisitions, and they’ve been successful integrating them,” Wang said. “Still, they’re high producers, and they have a very positive reputation in the marketplace.”

BharCap structured the deal without leverage, Wang said.

“We want the business to be able to grow freely with the tuck-in [M&A] thesis and everything Joel’s done historically,” he said. “We didn’t want leverage creating a kink in that story.”

The sponsor will probably use financing going forward from private credit or banks, Wang said.

BharCap typically invests USD 50m to USD 300m for acquisitions for businesses with EBITDA in the range of USD 10m-USD 50m.

M&A and operational backing

The deal added the first hybrid wealth manager to BharCap’s holdings with about USD 3bn of assets under administration.

BharCap made the investment out of its second fund, which closed in May with USD 652m in commitments and is about 50% deployed, he said.

The fund maintains the PE firm’s strategy of investing in wealth and asset management, insurance distribution and services, and payments, Wang said.

GCG intends to establish its own RIA business (it currently uses Osaic as the platform for that line) while it looks to bolt on advisories handling USD 250m to USD 1.5bn in assets and generating at least USD 1m in EBITDA, Burris said.

BharCap targets a gross 25% internal rate of return (IRR) and 3x multiple on invested capital (MOIC) over a five-year hold period, Wang said.

The sponsor will provide GCG with capital and contacts to be able to jump on the right opportunities and structure deals quickly, he said.

“Joel has carte blanche authority to go out and find deals,” Wang said.

BharCap also plans to flesh out the advisory’s operational infrastructure to institutionalize the business, Wang said.

The firm will also use its own experience scaling wealth managers to guide GCG’s expansion, he said. When BharCap was a subsidiary of Pine Brook Partners, it launched TRIA Capital Partners in January 2021 as a minority investor in RIAs. The PE firm’s most recent exit was the sale of Altus Receivables Management to Astira Capital.

“The third piece is just helping them with guidance, because we have other wealth manager businesses that have gone from small to medium, or medium to large, so we’ll be providing advice along the way,” Wang said.