Now that the $7-billion Los Angeles firm has digested Deloitte, its executive M&A team ponders its next move

March 5, 2013 — 5:11 PM UTC by Lisa Shidler


Brooke’s Note: They say games in sports are won in practice more than the playing field. There’s something to that with doing M&A. The deal itself is writing checks, signing papers and sending press releases. Whether they succeed depends on what happened in more mundane preparatory moves. We write this article about a proven deal-maker lining up its ducks.

Aspiriant, a $7 billion RIA, has recast its executive suite in advance of what it says will be a major acquisition to be announced early in 2014. CEO Rob Francais is unwilling to say which firms he has his eye on but offers this key specification: they must between $1 billion to $3 billion in assets under management.

“The relationships take the same amount of time regardless of the assets,” Francais reasons. “You might as well have more scale out of it.”

He says a handful of firms have approached Aspiriant but declines to name them.

Francais is no stranger to big deals. Los Angeles-based Aspiriant was borne of a merger between Quintile Wealth Management LLC and Kochis Fitz Tracy Fitzhugh & Gott Inc. in 2008. Francais was head of Quintile. In 2010, Aspiriant bought $2.9 billion Deloitte Investment Advisor. See: How RIAs like Aspiriant and United Capital are working to put financial planning back at the center of financial planning firms.

COO-CFO switch-up

In anticipation of the as-yet hypothetical mega-merger, the firm has shuffled some key management positions.

Michael Kossman, formerly chief financial officer, is now chief operating officer. Taking Kossman’s place as CFO is Bret Magpiong. He joined Aspiriant last summer with more than 25 years of experience in the industry and officially took up the title at the beginning of this year. Most recently, Magpiong served as the president and chief personal financial officer for Sasco/Roxford One, a privately held investment management firm.

The executive shifts are a sign of Francais’ seriousness of purpose, says David DeVoe, of DeVoe & Company.

“The promotion of a CFO to COO is not uncommon for an organization that intends to accelerate its acquisition strategy,” he says. “Michael Kossman’s intimate understanding of the Quintile/Kochis merger and Deloitte acquisition will serve the company well in future transactions.” See: Why Deloite Touche talent is such a coveted building block at some esteemed RIAs.

Everything in-house

It’s no surprise that Francais will be the chief deal negotiator in this process. Kossman runs the financial models and assesses the potential acquisition from an operational perspective and Bob Wagman, chief strategy officer, evaluates the strategic fit of the prospective firm. The firm also uses its own attorney. See: How Rob Francais combined two giant RIAs and then added the assets of Deloitte Investment Advisors.

Michael Kossman: In the not-too-distant past we generally ha[d] senior management distracted with client service.
Michael Kossman: In the not-too-distant past
we generally ha[d] senior management distracted
with client service.

“We do everything in house. Francais says.

Distinct division of duties

A significant difference between Aspiriant and other RIAs, says Francais, is that top managers work exclusively on strategy and do not meet with clients.

Kossman says he likes the fact that the RIA lets its top management team focus on the big-picture issues.

“Smaller organizations, including us in the not-too-distant past, we, generally have senior management distracted with client service, and the firm often pays a price as a business proposition for that,” he says.

Serious intentions

Aspiriant has 125 employees in seven locations. The firm serves 800 families and the average family has about $8.5 million in assets.

“When I hear Rob say he’s planning for an acquisition in a year, I believe him because this is a firm that does what they say they’re going to do,” says Cecile Munoz, president of U.S. Executive Search & Consulting.

Francais says the firm is poised to begin serious negotiations for the next deal by the second half of this year. He hopes to announce a new acquisition in early 2014.

“We’re in the home stretch getting through the integration and now it’s time to focus on operations and locate the next candidate and we’ll start those negotiations by the end of the year and finalize them by early next year. And, then it all starts all over again, but I think it gets a little easier each time. We learn how to do it more effectively.”

Mentioned in this article:

DeVoe & Company
Mergers and Acquisition Firm
Top Executive: David DeVoe

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