Effective dealmakers tend to approach their craft much like a couple in love, says MAI Capital’s Rick Buoncore.
“It’s a process to get to know each other,” says Buoncore, the wealth management firm’s managing partner. “You date, then you get engaged and then you get married. That doesn’t typically happen in six months. It happens over a year or two, and quite honestly, most of our transactions have taken awhile to culminate. People who we talked to in 2017 are now starting to talk to us and saying, ‘Hey, let’s do something.’”
That strategy has worked well for Buoncore, who took over at MAI in 2007 after his prior firm, BC Investment Partners, bought McCormack Advisors International. In that time, MAI has grown from $900 million to nearly $7 billion in assets under management.
“In the next three to five years, we hope to be at $15 billion, if not $20 billion or $25 billion,” Buoncore says. “What we’re saying is, come join us. We think our trajectory together will be better than yours as it is today, and certainly better than ours as it is today.”
In this Dealmakers feature, we spoke with Buoncore about the evolution of MAI’s acquisition strategy.
A pivotal deal in the rise of MAI was a July 2017 transaction in which West Palm Beach, Florida-based Wealth Partners Capital Group made a minority investment in the firm.
“It was a common equity ownership interest, and they have become our M&A team,” Buoncore says. “We hadn’t done any acquisitions prior to them becoming part of us. Since then, we’ve done four, including three this year. We have four letters of intent out right now. So it’s heated up.”
MAI acquired Calfee Financial Advisors Inc. in 2018, and this year has added CCI Financial Group Inc., MTX Wealth Management and John D. Dovitch & Associates.
One reason these deals take time, Buoncore says, is because of what MAI asks companies to do after they are acquired.
“We’re asking you to give up everything you’re doing and do it our way,” Buoncore says. “Have our name and go forward with us, and have our equity and lose a little bit of the control that you had. Sometimes not totally, but for sure, partially. It’s not right for everybody. But for those that it is — and it’s a good fit for us so far — it’s been phenomenal.”
When MAI looks for acquisition targets, it’s looking for companies that bring a similar approach to their work providing wealth management counsel to clients.
“I’m not saying we’re doing it the only way, this is just the way we’ve chosen to do it,” Buoncore says. “We’re looking for firms and leaders that are like-minded in the sense of how they run their business. Are you client-centric, or are you just worried about what you’re making? Are you investing in the future, or are you not? If you’re not, that’s OK, because we have and we can help you catch up. But if you’re not like-minded and you don’t really put clients at the forefront, it doesn’t matter whether you have because we just have a cultural difference that can’t be reconciled.”
Move the needle
The acquisition of Reston, Virginia-based MTX Wealth Management was done to support MAI’s plans to formally launch a division to represent professional athletes. The firm also is working on a joint venture with a group in North Carolina in which it would provide wealth management counsel to doctors.
“If we are successful in both of these, we become the go-to place for doctors and the go-to place for athletes,” Buoncore says. “I can’t think of two better earning streams than those two groups.”
The firm also has an opportunity to buy a company that is part of a large public company that no longer wants the business. He says such corporate divestitures require a slightly different approach.
“So the first question you have to ask yourself is, if they don’t want it, why do I want it?” Buoncore says. “If it can play a role for you that the big company can’t get the benefit of or can’t move the needle for, but it can for you, and if there are other things you can provide to the clients of that company that the big company doesn’t, then maybe there’s a way for you to make it work. If you can get it at an attractive price because it’s less attractive to them and more attractive to you, then it’s a win-win for everybody.”
Whatever type of deal Buoncore makes, he has found success. He’s particularly proud of being listed at No. 26 recently on the Barron’s Top 50 RIA Firms List.
“We have 25 more places to go,” he says. “We’re going to No. 1, and that’s a mission. It starts and stops with taking care of your client. Because if you don’t, nothing else matters.”