The transaction includes a six-person team managing more than $700 million in assets, according to Lido Advisors.
The acquired team and the mutual funds included in the transaction will be formed into a new company, Oakhurst Capital Management, which will be owned by the three purchasing firms as a joint venture.
According to Lido Advisors’ leadership, the expertise each firm brought to the table offset the complexity caused by the multiparty transaction.
Lido Advisors focuses on wealth management services for high-net-worth individuals. It was originally built, according to founder and Chairman Gregory Kushner, to provide specialized investing options to those on the lower end of the high-net-worth scale.
“Whether you have a million or tens of millions, you shouldn’t be relegated to a standard 60-40 blend of stocks and bonds,” Kushner said. “You should also have access to things like private equity real estate investments.”
Kushner said Oakhurst Advisors, which is an affiliate of Lido, primarily serves institutional investors, making it the business-to-business counterpart to Lido.
“Because Oakhurst has already run a mutual fund,” Kushner said, “it made sense for Oakhurst rather than Lido to be the (leading) joint-venture partner.”
F/m Acceleration primarily brings its trading and operational platform to the partnership, according to Kushner.
“The bottom line is (the multiparty partnership) is bringing real efficiencies and economies of scale going forward,” Kushner said.
Lido and F/m began discussions on a possible deal shortly after the companies’ leadership met in January. Both parties, according to Kushner, wanted to move into the fixed-income business.
Lido had agreed to buy the First Western fixed-income team last year, but that deal fell through. Details were not disclosed, but the newly structured four-way transaction appears to have addressed the previous deal’s issues.
Kushner said the purchase was made, in large part, to expand Lido’s range of options in how it manages its clients’ investments.
“Having a very strong fixed-income team in-house lowers the overall costs to clients,” Kushner said. “With yields being as low as they are in the traditional fixed-income world, we need to be as creative as possible with our solutions.”
The new venture is also part of Lido’s plans to expand and become a “nationally recognized wealth management firm,” which kicked off in 2017, according to the company.
“We’re focused on talent, opportunity and geography,” said Brad Hixson, executive vice president at Lido. “This fits into talent and opportunity.”
