What's Happening?
New Mountain Capital has completed its exit from Lincoln Investment, a Fort Washington, Pennsylvania-based RIA and broker-dealer. This transaction returns full ownership of Lincoln Investment to the Forst family, who founded the company in 1968, and its advisor
shareholders. New Mountain Capital, an investment firm managing approximately $60 billion in assets, initially invested in Lincoln Investment in 2020. During the partnership, significant changes were implemented, including enhancements to Lincoln Investment’s operating platform and leadership team. The collaboration led to a 75% increase in fee-based assets and a growth in total client assets to approximately $63 billion, encompassing both fee-based and brokerage assets. Kathy Leckey was appointed CEO in June, and other executives were added as part of an executive succession plan. Ropes & Gray served as legal counsel to New Mountain, while Morgan Lewis & Bockius represented Lincoln Investment.
Why It's Important?
This exit marks a significant milestone for Lincoln Investment, transitioning it back to full family and advisor ownership after a period of strategic partnership with New Mountain Capital. The investment from New Mountain Capital facilitated substantial growth and modernization for Lincoln Investment, particularly in its technology infrastructure and leadership structure. The reported 75% increase in fee-based assets and the overall growth to $63 billion in client assets demonstrate the success of this partnership. For the financial services industry, this event highlights a model where private equity investment can be leveraged to drive growth and operational improvements, ultimately leading to a successful exit that empowers the original founders and advisors. It also underscores the importance of strategic investments in technology and leadership development for RIAs and broker-dealers seeking to expand their market presence and service capabilities.
What's Next?
With New Mountain Capital's exit, Lincoln Investment will embark on its next chapter as a fully independent, advisor- and family-owned firm. The company is expected to continue leveraging the enhanced technology and infrastructure developed during its partnership with New Mountain. The leadership team, including newly appointed CEO Kathy Leckey, will likely focus on sustaining the growth trajectory and further expanding its services for advisors and clients. The return to full family and advisor ownership may foster a renewed sense of autonomy and direct control over strategic decisions, potentially influencing future growth initiatives and client engagement models. Lincoln Investment recently recruited Financial Advisors Curtis Wilcox and Paul Niemiec, indicating a continued focus on expanding its advisor network and client assets.
Beyond the Headlines
The successful partnership between New Mountain Capital and Lincoln Investment, culminating in the return of ownership, illustrates a nuanced approach to private equity involvement in the financial advisory sector. Rather than a permanent acquisition, this model demonstrates a strategic investment designed to catalyze growth and then facilitate a transition back to original ownership, enriched with enhanced capabilities. This approach can be particularly appealing to family-founded businesses that seek capital and expertise for modernization without relinquishing long-term control. It also highlights the evolving landscape of wealth management, where technology and scalable platforms are becoming increasingly critical for attracting and retaining advisors and clients. The emphasis on strengthening technology and infrastructure during the partnership reflects a broader industry trend towards digital transformation and operational efficiency.
