Charlesbank Capital Partners, a New York-based private equity firm with about $24 billion in assets under management, has invested in four wealth management platforms since starting a thematic initiative in the sector in 2020. The firm made its first RIA investment in Lido Advisors in early 2021. Lido now manages more than $46 billion in assets.

Charlesbank invested in Pensionmark, now called World Investment Advisors, in 2022. In January 2024, the firm invested in Rise Growth Partners, an RIA growth accelerator that holds minority stakes in four RIAs in partnership with Joe Duran. Charlesbank also holds a stake in Perspective Financial Group, a U.K.-based independent financial adviser.

David Katz, a managing director at Charlesbank who oversees the firm's financial services investing strategy, said the wealth management ecosystem is a large, fragmented industry undergoing a generational and technological transition. Clients are demanding more sophisticated services, advisors are looking for better infrastructure, and many smaller firms need solutions for succession and scale, he said.

The next chapter in wealth management is about building institutions rather than simply aggregating assets, Katz said. The firm looks for platforms that excel at organic growth, recruiting, technology, investment capabilities, incremental services such as tax and estate planning, and the advisor experience, he said.

A decade ago, an investment thesis could rely much more heavily on industry tailwinds and consolidation, Katz said. Now the bar is higher, he said. The firm looks for platforms that have proven the ability to deliver durable organic growth, advisor productivity and recruiting, client retention across cohorts, strong management teams, and the ability to integrate new hires and acquisitions, he said.

Charlesbank differentiates itself through industry experience and knowledge, Katz said. The firm has been among the most active middle-market investors in wealth management, he said. The firm helps build out management teams and recruit leadership, invests in technology and infrastructure, builds M&A teams, and supports platforms in becoming thoughtful consolidators, he said.

Charlesbank was established in 1998 after its founding team spun out of the Harvard University endowment. The firm's investment strategy is research-based and goes deep into sub-sectors it has conviction in, Katz said. Katz has been at the firm for 13 years.