PE Deal Fuels Berger Financial’s Bid To Conquer Mass-Affluent Market
Like many acquisitive registered investment advisors in the rapidly consolidating wealth management space, Berger Financial Group welcomed a private equity partner in agreeing late last month to sell a big chunk of its fast-growing business to Investcorp, a global alternative investment manager based in Bahrain.
But unlike the many RIAs chasing the higher fees from fatter portfolios of high-net-worth clients, Berger, a full-service wealth management platform in Minneapolis managing more than $3 billion for individual investors and retirement savers, wants the added capital firepower to accelerate its growth in the expanding $25 trillion mass-affluent market.
The size of mass-affluent households is generally pegged at between $500,000 to $2 million in investable assets. Berger’s average client has $750,000.
“It’s an interesting thing in our industry. The bigger you get, the higher you raise your minimums and then the more you want larger and larger clients,” Berger CEO Nick Asmus told Financial Advisor. “We’re doing the opposite. We want to serve middle America; we want to serve the mass affluent. That’s an underserved market, and I think those individuals and those families deserve well thought-out financial planning advice, and that’s why we want to scale.”
Berger and Investcorp, which manages more than $62 billion through 14 offices across several countries, including the U.S., Europe, India and China, announced that Investco, through its North American Private Equity Fund, acquired a majority stake in Berger.
The firms didn’t disclose details of the transaction, which closed July 29.
Getting to $10 billion to $15 Billion In AUM
Accepting an outside partner for the first time in Berger’s 45-year history was a bit bittersweet, Asmus said, noting that Berger, founded in 1981, was one of the few fully employee-owned, or ESOP, firm in the state and in the wealth management space in general.
But Asmus said management could grow AUM to $10 billion to $15 billion within five years, as his team uses the added capital to turbocharge an acquisition strategy already shifting into higher gear. Twenty of the 25 acquisitions the firm has made in its history have come in the past 10 years, according to the CEO. They’re in the $40 million to $300 million asset range.
The 43-year-old Asmus joined Berger as president after Berger bought Wade Financial Group in 2016, where Asmus served as president. He was made president of Berger upon the close of that deal before being named CEO in late 2021.
“We think that’s a very achievable goal,” Asmus told FA, of the AUM target. “We don’t want to scale too fast, too quickly and get over our skis. But we also think we’ve got the support and the team with a few key additions to achieve some pretty incredible growth.”
“Right now we are in 10 locations in five states, and we want to be in 10 states and 25 locations,” he added.
The new markets he’s targeting include Texas, Florida and Colorado, and he’s looking for deals “intentionally” in his home Midwest region.
Management has two letters of intent for the acquisition of practices with assets of $100 million and $70 million, he said.
Both deals would be in Illinois, where Berger already has a presence, and could be announced by the end of the year, he said.
Management is also taking the usual routes—seminars, podcasts, client referrals and centers of influence—to grow organically, at a “high single-digit range,” Asmus said.
Betting on Private Equity
Mergers and acquisition activity in the wealth management sector is soaring to record heights, driven mainly by private equity capital gushing into the space, either buying RIAs outright or taking equity stakes in them. The sector is fragmented and ripe for consolidation, with practices that boast recurring revenue from sticky client relationships.
Furthermore, the “need for the services is only increasing with the complexity and volatility of the world,” Vitali Bourchtein, managing director of Investcorp’s North American private equity team, told FA.
Founded in 1982, Investcorp specializes in alts asset classes, including private equity and real assets, and has invested in professional services across accounting, consulting and talent and entertainment.
The global manager has been looking to jump into North American wealth management for three years, focusing on the mass affluent segment, as it’s especially underserved, according to Bourchtein, whose fund has deployed more than $25 billion in transaction value.
“Berger is exactly the kind of platform we look to back: a differentiated, fee-based wealth management business with exceptional client and advisor retention and significant runway for value creation in a large, fragmented market,” he said in the news release announcing the deal.
“Organic growth is the most valuable thing, and they have a strong track record of double-digit growth,” Bourchtein told FA. “We plan to make sure that continues.”
Keeping ESOP Culture
Berger was on the hunt for a partner for about two years, Asmus told FA.
“We had gotten so big that we were running into constraints from a capital standpoint,” he said. “We needed a partner that understood the culture surrounding an ESOP and employee ownership. That’s what we found with Invesco.”
It wasn’t easy finding a PE firm working the mass affluent space. “There were a lot of partners that didn’t want to look at us because of that,” he said, adding that Berger had to overcome initial resistance from employees and advisors to bringing on a PE partner, given PE’s negative reputation.
“There’s hardly any ESOPs in our space,” Asmus said. “We needed a partner that understood the culture surrounding an ESOP and employee ownership.”
The CEO pushes back against headlines that describe the transaction as an “acquisition.” He maintained that employees still own some 35% of the company and has two of the six members on the six-member board of directors. Investcorp has three while two are independents, according to Asmus.
Attracting Mass Affluent Client
Both parties maintain that Asmus and his team will continue to run the operation.
Their overall mission is to broaden the firm’s footprint in a mass-affluent space that, according to Cerulli Associates, has grown from $14 trillion to $25 trillion in 2025 but is full of clients that are mostly young and underserved.
But it’s also a market space where Berger must contend with behemoths such as Fidelity, Vanguard, Charles Schwab—and robo advisors.
Berger isn’t trying to be the lowest cost provider, but rather to build around the client’s entire financial life, Asmus said.
“Our combination of wealth management and in-house tax expertise allows us to connect investment decisions with the tax return and the client’s broader financial plan,” he said. “Ultimately, I believe the firms that win the mass-affluent market will be those that can deliver sophisticated, coordinated advice efficiently while still making every client feel genuinely known. That is the position Berger is building toward.”
