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Rise Growth Partners secures $250M to invest in midmarket RIAs

Illustration of a blank check with a magnifying glass hovering over it, revealing a one hundred dollar bill within the glass

Illustration: Annelise Capossela/Axios

Rise Growth Partners, the RIA investment firm founded by Joe Duran, has secured a $250 million capital commitment from Charlesbank Capital Partners.

Why it matters: Duran is a veteran of the wealth management industry with multiple exits under his belt.

Background: Duran sold his last company, United Capital Financial Partners, to Goldman Sachs for $750 million in 2019.

  • Prior to that, Duran was president of Centurion Capital, an investment manager acquired by General Electric in 2001.
  • Rise's leadership team includes Darius Mirshahzadeh, Terri Kallsen, Brian Shenson, Mike Mirshahzadeh, Dan Newhall and Phil Jacobson.

How it works: When evaluating potential RIAs to work with, Rise conducts an enterprise readiness assessment, where it benchmarks firms across 45 different areas.

  • "We are benchmarking them against their colleagues and against what it takes to be a $10 billion-plus RIA ... and showing them, in a heat map, what gaps they've got," Duran says.
  • It then creates what Duran calls a voyage roadmap. "It will provide you the capital, the sub-acquisitions, the branding work, and operational excellence you need on your platform so you can get the best exit multiple," he says.

What's next: Rise plans to take minority stakes in high-growth RIAs with between $1 billion and $5 billion in AUM.

  • Through a combination of capital and operational support, it aims to grow those firms into national platforms with $10 billion or more in assets.
  • Rise's leadership team includes Darius Mirshahzadeh, Terri Kallsen, Brian Shenson, Mike Mirshahzadeh, Dan Newhall and Phil Jacobson.

State of play: Duran announced the new firm last September with a pipeline of advisers managing over $50 billion in assets.

  • Now, Duran says, the firm has $220 billion in the pipeline, of which about $100 billion across 33 firms is in active discussions for possible investment.
  • He plans to invest in two or three firms in the coming months and another two or three in the fall of next year.
  • "The goal is to get five or six really good firms that we could really help to turbocharge. ... Our job right now is to just find the best."

Of note: Ardea Partners served as financial adviser to Rise for the transaction.

  • Simpson Thacher & Bartlett LLP provided legal counsel to Charlesbank, while Kilpatrick Townsend & Stockton LLP provided legal counsel to Rise.
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