Focus Financial Partners LLC said last Monday that it has added Telemus Capital Partners LLC of Southfield, Mich., to its roster of now 27 partner firms.
Telemus, with $2.2 billion in assets, was founded in 2005 by former UBS AG brokers Gary Ran, Bob Stone and Lyle Wolberg. Mary Bakhaus and Joshua Levine also are partners.
The firm has 10 financial advisers.
Terms of the deal weren't disclosed.
Big portfolios
Telemus serves mostly entrepreneurs and professionals with $1-million-plus portfolios and net worths from $5 million to $20 million, Mr. Wolberg said.
“We've been following Focus since they started in 2006, and they've been calling us every three months,” he said. “We felt it was a great time to become a partner and get access to capital to help us grow.”
The firm doesn't have any acquisition targets on the radar, “but over the last eight years, we've had some opportunities we couldn't do” without access to financing, Mr. Wolberg said.
In 2007, Telemus bought Beacon Asset Management LLC, a money management firm with a “unique corporate taxable-fixed-income strategy,” he said.
“We're best-of-breed,” Mr. Wolberg said. “If we can't find something out there, we'll try to create it ourselves.”
The firm uses several subadvisers for client portfolios.
One subadviser is Robinson Capital Management LLC, a firm founded by Telemus' former chief investment officer, James Robinson, who left last December to run several hedge funds.
Telemus also uses Evercore Wealth Management for core equity management.
In addition to help with acquisitions, the firm wants to gain access to Focus' expertise with compliance, technology, marketing and operations, as well as networking opportunities with other Focus partner firms, Mr. Wolberg said.
Decentralized approach
Although some critics wonder how Focus' decentralized approach with its partner firms will ever achieve scale economies, that is exactly what attracted Telemus to the aggregator, he said.
“We've been approached by others, and every time we looked, it seemed like you would end up as a subsidiary of that [aggregator] firm,” Mr. Wolberg said.
The Telemus deal was the fifth this year for Focus, whose partner firms manage more than $65 billion.
Focus buys a percentage of partner firms' cash flow in exchange for cash and stock in Focus.
