A $33B-AUM PE Buys a Fund Distributor
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Wednesday, July 07, 2021

A $33B-AUM PE Buys a Fund Distributor

A private equity firm with about $33 billion in AUM is buying a mutual fund distributor that also does other back-office work for the industry.

Richard John "Rich" Berthy
Foreside Financial Group, LLC
Founder, CEO
Today Rich Berthy (CEO of Foreside Financial Group, LLC), Sid Ramakrishnan (principal of Genstar Capital), Tony Salewski (managing director of Genstar), Spencer Hoffman (partner at Lovell Minnick Partners), and Jason Barg (also a partner at LMP) confirm that San Francisco-based Genstar has agreed to buy Philadelphia-based LMP's majority stake in Portland, Maine-based Foreside. Pricing terms of the deal, which is expected to close this quarter, were not disclosed.

Raymond James advised Foreside on the deal. On the legal side, Morgan Lewis advised Foreside, while Willkie Farr & Gallagher advised Genstar.

Under the Genstar-LMP deal, Berthy and David Whitaker, Foreside's president, will both stay on and remain shareholders of the firm. The new deal comes four years after LMP bought its majority stake in Foreside. (Berthy previously was Foreside's majority shareholder.) Foreside was founded in 2005 and now distributes more than $1 trillion in assets.

Genstar may be familiar to some fundsters. The PE firm already backs Ascensus (a 401(k) recordkeeper, 529, and IRA shop), Cetera, ISS, Mercer Advisors, and Orion.

Berthy describes the Genstar deal as a new chapter for Foreside, which continues to make its own acquisitions.

"We share a strategic vision to broader our current scope of products and services, underscored by the belief that there remains a significant need for outsourced fund and GRC services in the market," Berthy states.

Ramakrishnan praises Foreside as "one of the most respected outsourced solutions providers to many of the world's leading asset and wealth managers." Salewksi calls the deal "a signature Genstar transaction, representing an opportunity to invest in a high-quality business in the asset and wealth management ecosystem supported by compelling secular GRC tailwinds."

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