Rise Growth Partners, a newly created platform to invest in registered investment advisors (RIAs), expects to buy minority stakes in about a half-dozen fee-based wealth managers in coming years, said David Katz, managing director of Rise investor Charlesbank Capital Partners.

Austin, Texas-based Rise was started last year by wealth management industry veterans to provide tools and expertise to mid-sized RIAs. It intends to invest and hold positions until the firms grow client assets 4x-5x, Katz said.

The platform expects it will invest for a five-to-10-year horizon, Katz said. Some could reach that growth milestone sooner, though Rise will expect to hold its positions for at least three years, he said.

“The goal is to partner with five to six high-quality RIAs that have the aspiration to scale but not necessarily the full roadmap,” Katz said.

Rise has built a pipeline of interested sellers and expects to close its first deal this year, he said.

At the end of the investment period, Rise expects to sell its position in each firm to another investor, sponsor or strategic buyer, he said.

Rise will prefer advisors with client assets under management (AUM) in the range of USD 2bn to USD 7bn, he said.

The new company is looking for growth-oriented management teams with differentiated models that have outperformed the industry and whose principals will stay as partners to grow their businesses, he said.

Rise will not manage assets but will provide operational guidance and M&A expertise in addition to investment capital to firms looking for the resources to scale up without having to sell controlling interests, he said.

Joe Duran formed Rise with about a dozen partners experienced in the wealth management industry and auctioned a majority stake in the business in a narrowly tailored, formal sale that landed Charlesbank, Katz said. The PE firm committed USD 250 million in capital to be deployed for investments alongside “meaningful commitments” from management for the venture, Katz said.

Charlesbank backs Lido Advisors, and the firm had been looking for another opportunity to invest in the space, he said. Lido has more than doubled AUM to more than USD 20bn in fewer than three years with Charlesbank sponsorship, Katz noted.

Duran, who is an executive managing partner of Rise, is the former CEO of United Capital, which sold to Goldman Sachs in 2019. Duran most recently served as partner and co-head of Goldman’s workplace and personal wealth business.