News Mentions & Press Releases
A new deal has sold off control of a sprawling, family-run financial advisory services firm. NorthStar Financial Services Group, the Omaha, Neb.-based parent company of Orion Advisor Services, CLS Investments, Gemini Alternative funds and other subsidiaries, has agreed to sell a majority stake to private equity firm TA Associates. Patrick Clarke, NorthStar’s late co-founder, died in a fatal plane crash in 2012. But according to son Eric Clarke, CEO of Orion Advisor Services, that is not what ignited the search for a buyer. “Firms proactively reaching out to us prompted us to consider the option and once we began the process, we realized the opportunity of having a well-funded partner and the potential of NorthStar,” he said.
It’s conventional practice that when you’re looking to hire an investment manager, you consider the manager’s three-year relative return as a gauge of future performance. Yet in the research that I’ve done with colleagues into how to select a money manager, we found that a three-year positive return actually has a negative correlation to return in the next three years. In other words, the best time to hire a disciplined manager might be when their style of investing is out of favor—not right after they’ve have a good run. The market is cyclical, and so too is investment style. Consider value investing. This has been a very successful approach, but there are some years when it doesn’t work. This suggests that when you see a strong three-year performance by an individual money manager, what you’re really seeing might be a synergy of investment style and market conditions. It may well be that there is a cyclicality to investment manager returns, just like there is to asset class returns.
The global private equity firm TA Associates, which has offices in Boston, MA, Menlo Park, CA, London and Asia, is to acquire a majority interest in US-based NorthStar Financial Services Group and its nine subsidiary wealth management industry service providers. The move represents a “significant investment and continued push by TA into the RIA and fintech space,” Todd Clarke, chief executive of CLS Investments – a NorthStar subsidiary – told Family Wealth Report. With approximately $275 billion in assets under management and administration, NorthStar provides support services to registered investment advisors, independent broker-dealers and investment management firms. It has around 700 employees and is headquartered in Omaha, NE, with additional offices in Hauppauge, NY; Chicago, IL; Mill Creek, WA; and Scottsdale, AZ. Besides CLS Investments, the firm’s primary business lines are: Gemini Alternative Funds; Gemini Fund Services; Gemini Hedge Fund Services; Northern Lights Compliance Services; Northern Lights Distributors; and Orion Advisor Services. “The creation of new alternative investment products is occurring at a rapid pace and the RIA market is one of the highest growth segments in financial services,” said Todd Crockett, a managing director at TA Associates.
Omaha’s NorthStar family of financial services companies has agreed to sell a majority stake to a Boston-based private equity firm. TA Associates, whose investments include Omaha data center operator Cosentry, said Monday it has agreed to buy a majority share of NorthStar Financial Services Group. NorthStar operates nine subsidiary companies that serve advisers in the wealth management industry. The companies said in a statement that NorthStar executives will continue in their positions and will continue to own a large stake in the company. Financial terms were not disclosed.
Selling to a private equity firm was not the only option the executives at NorthStar Financial Services Group were considering when two of its owners, Michael Miola and Lana Clarke, wanted to sell their shares and retire. NorthStar, the holding company for CLS Investments, Orion Advisor Services and Gemini Fund Services, was also looking at purchasing the shares themselves, going public, and taking on strategic partners. In the end, private equity firm TA Associates will take a majority interest in NorthStar, the firms announced Monday. “A private equity option really rose to the top because it allowed us to continue to own a portion of the business, operate the day-to-day management of the business, allowed us to also gain some capital so that we could do acquisitions in the near-future,” said Todd Clarke, CEO of CLS Investments, an ETF strategist.
Boston-based private equity firm TA Associates announced on Monday that it is acquiring majority interest in NorthStar Financial Services and its nine subsidiary providers, including Orion Advisor Services. NorthStar, with $275 billion in assets under management and more than 650 employees, has a variety of companies with services to help financial advisers, including: Gemini Fund Services, which provides mutual fund administration and pooled investment solutions; Orion Advisor Services, which provides software as a service and portfolio accounting services to registered investment advisers; and CLS Investments, an exchange-traded funds strategist. Terms of the deal were not disclosed.
TA Associates, a leading global growth private equity firm, today announced it has signed a definitive agreement to acquire a majority interest in NorthStar Financial Services Group, LLC, and its nine subsidiary wealth management industry service providers. NorthStar’s management team will remain significant owners following closing, which is expected to occur in the second quarter of 2015. Additional terms of the transaction were not disclosed.
TA Associates will purchase a majority stake in Orion Advisor Services LLC as part of its purchase of its parent company, NorthStar Financial Services Group LLC, which has approximately $275 billion in assets under management and administration. Northstar currently holds CLS Investments LLC, Gemini Alternative Funds, Gemini Fund Services, Gemini Hedge Fund Services, Northern Lights Compliance Services and Northern Lights Distributors. With this purchase, the last of the big five RIA-portfolio-accounting firms has traded in its independence for a larger capital base, access to greater expertise and increased acquisition prowess. Joining Orion, the Omaha, Neb.-based maker of portfolio management systems for RIAs, in this category are Tamarac, Performance Technologies, Black Diamond and, most recently, Advent Software.
Boston-based private equity firm TA Associates has agreed to acquire a majority stake in Omaha-based NorthStar Financial Services Group, the holding company that includes ETF strategist CLS Investments, mutual fund administrator Gemini Fund Services and Orion Advisor Services, the outsourced portfolio accounting and management service. No financial details of the investment were disclosed. In an interview Monday, Eric Clarke, CEO of Orion, and Todd Clarke, CEO of CLS Investments, spoke of the process that resulted in the eventual partnership with TA Associates and how TA’s investment will facilitate NorthStar’s continued growth. Both men retain significant ownership stakes in NorthStar and will remain in their management positions.
Among the many things to love about ETFs is the passive investing style. For investors, that means low costs and consistent exposure.
But when it comes to portfolio holdings and weightings, not every exchange traded fund is sitting still. For successful investing, ETF owners are better off keeping up with index changes.