NorthStar Financial, the parent company of portfolio accounting firm Orion Advisor Services, is to buy FTJ FundChoice, a turnkey asset management program (Tamp) firm with approximately $10 billion in assets under administration.
NorthStar will acquire the Tamp from middle market private equity firm Seaport Capital, with the transaction expected to be closed in the second quarter of 2018.
The deal marks Orion's first step to take on Tamp firms such as AssetMark and Envestnet, according to Eric Clarke, chief executive of Orion.
'Those are the firms we are competing with to earn enterprise-level deals,' Clarke told Citywire. 'It will make us a player in that space and provide us the opportunity to win those enterprise-level deals. '
The acquisition is expected to complement the list of technology solutions and accounting services that NorthStar offers to financial advisors and expand the choices of model portfolios on Orion's platform.
Specificly, advisors using the Orion Communities platform, a model portfolio sharing platform with model portfolios from BlackRock, Russell Investments, and CLS Investments as well as advisors’ own customized models, will now gain access to FTJ FundChoice’s separately managed account (SMA) services and strategists.
FTJ Fund Choice already counts Vanguard, Wilshire Associates, Russell Investments, Litman Gregory Asset Management, Ladenburg Thalmann Asset Management, Horizon Investments and American Funds as some of its SMA providers and strategiests.
Dean Cook will remains as FTJ FundChoice’s president and chief executive while the firm continues to operate within the same structure.
NorthStar Financial, a holding company for several subsidiaries including CLS Investments, The Gemini Companies, Orion and Northern Lights, is owned by private equity firm TA Associates and had nearly $680 billion in assets under management and administration at the end of February.
Founded in 2001, FTJ FundChoice is an RIA that provides advisors access to asset allocation strategies and model trading services by absorbing back office tasks such as trade reconciliation, account administration, fee billing, and performance reporting.
The combined firm will boost NorthStar's platform assets to $690 billion and investor accounts to over 2.5 million.