Focus Financial Partners embarks on international growth strategy to meet 2025 growth targets, says CEO and Chairman Rudy Adolf.
Last month, Focus announced that it had entered into a definitive agreement for the Geneva, Switzerland-based wealth management and investment firm. holding octagon join his partnership. The transaction is expected to close in the third quarter of 2022, Focus said.
The Octagon deal “represents a significant shift in our international growth strategy, which is to expand our partnership into countries with large independent wealth management sectors that cater to high net worth and ultra high net worth clients and are experiencing a circular dynamics similar to the United States, regulatory changes or other discontinuities,” Adolf said during the company’s first quarter earnings call, citing Australia, Canada and the United Kingdom as examples.
Switzerland is also “a good example of a market with characteristics that appeal to us a lot”, he added.
Focus had 84 partner companies at the end of the first quarter of 2022, up from 72 at the end of the first quarter of 2021, according to its latest earnings report. As of Thursday, Focus had five international partner companies – one with locations in Canada, one in Australia, one in the UK and one in Australia and the UK, according to information on its website.
The indie wealth market in Switzerland has about $500 billion in client assets and demographic trends similar to those in the United States, Adolf said, citing a 2020 annual report from the Swiss Association of Wealth Managers.
the Swiss Financial Market Supervisory Authority is implementing new licensing requirements for independent wealth managers, which will be a catalyst for consolidation, Adolf noted.
“We have a significant first-mover advantage in this market, which we believe will give us access to high-quality businesses with a truly global high and ultra-high net worth customer base,” he said.
Focus remains committed to the 2025 growth targets it originally announced at its Investor Day in December, according to Adolf. These targets are 125 partner companies; approximately $4 billion in revenue; $1.1 billion in adjusted earnings before interest, taxes, depreciation and amortization; and an ebitda margin of 28%.
Focus’ performance in the first quarter of 2022 “is significant” because it “reaffirms” the objectives of 20% or more growth in revenue and adjusted EBITDA that the company has set for 2022 as well as the 2025 goals, Adolf said.
Focus had total revenue of $536.6 million in the first quarter, up 36% year-over-year.
Board of Trustees
Meanwhile, Adolf expects fiduciary advice to be in high demand due to the current economic and geopolitical turmoil.
“These are very difficult times in many aspects of the economy and certainly geopolitically, but our business is made for times like this,” Adolf said.
“There is no other time when careful, fiduciary advice is provided by advisors who are not like brokers who sell things but who really provide holistic advice to clients they have generally known for years. many years, that’s where that advice matters the most,” he added.
Focus’ performance in the first quarter will allow it to “continue to deepen” its value-added capabilities, according to Adolf.
“Surrounding our partners and their clients with a strong suite of services in areas such as alternative investments, trust, estate planning and insurance, to name a few, is especially important in this environment. . Not only are these resources central to our value proposition, but they also enhance the attractiveness of our partnership,” he said.
Do you have a topical tip that you would like to share with FA-IQ? Email us at [email protected].