With traditional public investments feeling the continued impact of heightened market volatility, expertise and exposure to private investments are becoming increasingly important to RIAs and the families they serve. In this type of environment, AlphaCore Wealth Advisory is becoming a frequent acquirer of small and mid-size advisory firms hoping to utilize one of AlphaCore’s biggest differentiators: its allocation strategy, which constructs portfolios around a ‘core’ of alternative assets.
In a recent Citywire article announcing the firm’s latest expansion, AlphaCore CEO and Founder Dick Pfister, CAIA, explains how this environment has opened the door for AlphaCore to expand across the country through a strategic mergers and acquisitions strategy with firms that serve high net-worth families. “Clients are saying, ‘If you can’t offer it to me, I’m going to find it from somebody else,’” he tells the publication.
The specific merger highlighted by Citywire, AlphaCore’s second deal in 2023’s first quarter, is with Denver-based Johnston & Associates, a $400 million RIA specializing in ultra-high-net-worth business owners and entrepreneurs in Colorado and Oklahoma. “They have a decent amount of exposure to alternative strategies, but they’re looking for more diversified strategies other than just traditional long-only,” Pfister explains.
While many other firms might be hesitant to enter the crowded and competitive M&A space, Pfister tells Citywire he sees AlphaCore’s late entry into the mix as an upper hand in the current market environment.
“We’ve grown mostly organically…We didn’t succumb to these ridiculous multiples that were paid in 2020, 2021 and even early ’22,” Pfister said, noting that large acquirers with more traditional investment strategies have recently lost much of the growth they achieved through M&A.