Lightyear Capital and PSP Investments Agree to Acquire AIG Advisor Group
NEW YORK--(BUSINESS WIRE)--Lightyear Capital LLC (“Lightyear”), a New York-based
private equity firm focused on financial services investing, today announced that
investment funds affiliated with Lightyear and the Public Sector Pension Investment
Board (“PSP Investments”), one of Canada’s largest pension investment managers,
have signed a definitive agreement to acquire AIG Advisor Group, Inc. (“Advisor
Group”), a subsidiary of American International Group (“AIG”). The transaction is
subject to customary regulatory and other approvals. Terms of the transaction were
Advisor Group is one of the nation’s largest networks of independent financial advisors
with more than 5,200 independent advisors and $160 billion in client assets under
administration. Advisor Group provides comprehensive broker-dealer services, technology,
and advisory programs through its four registered broker-dealers and Registered
Investment Advisors (“RIAs”): FSC Securities Corporation, Royal Alliance Associates,
Inc., SagePoint Financial, Inc., and Woodbury Financial Services, Inc. The broker-dealers/RIAs
operate within a single network, positioning Advisor Group to provide a best-in-class,
industry leading platform.
Investment funds affiliated with Lightyear and PSP Investments will have the majority
of the seats on Advisor Group’s Board of Directors. Erica McGinnis will continue
in her role as Chief Executive Officer of Advisor Group. Valerie Brown, former Chief
Executive Officer of Cetera Financial Group, a portfolio company of Lightyear Fund
II, L.P. (“Lightyear Fund II”), will be joining Advisor Group full-time at the closing
of the transaction and will serve as Executive Chairman of the Board.
In 2010, Lightyear Fund II acquired three independent broker-dealers from ING which
were rebranded as Cetera to build an integrated, standalone firm. Under Lightyear
Fund II’s ownership from 2010 to 2014, Cetera became a leading independent broker-dealer/RIA
network and grew to approximately 6,600 advisors, up from 4,000 at the time of the
acquisition. Additionally, Cetera’s client assets under administration grew to $148
billion, up from $75 billion at the time of acquisition. Brown’s management team
and Lightyear helped build and optimize the platform to drive asset growth, operational
efficiency, and enhanced scale through several strategic acquisitions.
Mark Vassallo, Managing Partner of Lightyear, said, “We see enormous opportunity
to grow and expand Advisor Group, and we look forward to working with Valerie Brown
and Erica McGinnis, the Advisor Group management team, the PSP Investments team,
and the Advisor Group’s high-quality advisor force to grow the company.”
“We are pleased to be acquiring Advisor Group. Lightyear’s commitment to the asset
and wealth management sector is substantial and one where we have a deep heritage.
We look forward to working with Advisor Group and helping them expand the business,”
added Donald B. Marron, Chairman and Founder of Lightyear.
“We are pleased with this transaction, which is in line with PSP Investments’ private
equity strategy of making sizable, direct investments in high-quality companies
alongside experienced partners. We see multiple growth levers to drive Advisor Group’s
future performance and look forward to collaborating with Lightyear and the Advisor
Group management team to deliver on that plan,” said Guthrie Stewart, Senior Vice
President, Global Head of Private Investments at PSP Investments.
Valerie Brown, incoming Executive Chairman of the Board of Advisor Group stated,
“I’m thrilled to work alongside Lightyear Capital’s team again. I am confident Lightyear
and PSP Investments will help Advisor Group’s independent advisors thrive in this
challenging marketplace. I have known Erica McGinnis for several years and look
forward to working with her.”
“This acquisition marks an exciting chapter of growth for Advisor Group. Lightyear
and Valerie have proven track records of success in the wealth management space.
Together, we plan to grow the business and continue to deliver world-class service
to our advisors and their clients,” said Erica McGinnis, Chief Executive Officer
of Advisor Group.
About Lightyear Capital LLC
Lightyear Capital LLC is a financial services-focused private equity firm based
in New York. Lightyear, through its three affiliated private equity funds, has raised
over $2.5 billion of capital and makes primarily control investments in North America-based,
middle-market financial services companies. Lightyear targets investments across
the financial services spectrum, including asset management, banks, brokerage, financial
technology, insurance, and specialty finance. The firm brings strengths and discipline
to its investment process, as well as operating, transaction, and strategic management
experience, along with significant contacts and resources beyond capital. For more
information, please visit
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of Canada's
largest pension investment managers with $112.0 billion of net assets under management
as of March 31, 2015. Its team of approximately 600 professionals manages a diversified
global portfolio, including public equities, private equity, bonds and other fixed?income
securities, real estate, infrastructure, natural resources, and private debt investments.
PSP Investments is a Crown Corporation established to manage employer and employee
net contributions since April 1, 2000 to the pension funds of the federal Public
Service, the Canadian Forces, and the Royal Canadian Mounted Police, and, since
March 1, 2007, of the Reserve Force. PSP Investments’ head office is located in
Ottawa, Ontario, and its principal place of business is in Montréal, Québec. In
November 2015, it opened its first international office in New York City, USA. For
more information about PSP Investments, please visit www.investpsp.ca.
About Advisor Group
Advisor Group, Inc. is the holding company for a network of independent broker-dealers
that is among the largest in the United States. The four broker-dealers that comprise
Advisor Group - FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint
Financial, Inc., and Woodbury Financial Services, Inc. - are Registered Investment
Advisors and members of FINRA and SIPC. Advisor Group fosters the spirit of entrepreneurship
and independence exemplified by its more than 5,200 independent advisors across
the U.S. For more information, please visit www.advisorgroup.com.
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