Wealth management firms Mercer Advisors and Kanaly Trust, both with private equity backing, have agreed to merge. The combined company, with expected total assets exceeding $8 billion, will be headed by Mercer’s CEO David Barton.

Mercer, based in Santa Barbara, California, was acquired by Genstar Capital in 2015 from lower middle-market private equity firm Lovell Minnick Partners, which owned the firm since May 2008. Mercer provides its affluent clients with fee-based financial planning, retirement and estate planning services, investment, tax and wealth management services. Currently, Mercer advises on over $6 billion on behalf of its clients.



Kanaly, with over $2 billion in assets under management, has been backed by Lovell, which will retain a stake in the company. The Houston-based company offers services similar to those of Mercer, and also acts as trustee for executor for estates with more than $2.5 billion in assets.

Moelis & Company acted as financial adviser to Kanaly, while Davis Graham & Stubbs served as legal counsel to the company. Willkie Farr & Gallagher acted as legal adviser to Mercer.

M&A transactions in the asset management space are expected to pick up, as combined firms become more equipped to handle regulatory and compliance pressure. Additionally, private equity firms and other strategic buyers have been eyeing the sector for new targets.

In December, New York investment bank Loeb Partners announced a strategic alliance with  London-based Spencer House Partners LLP, which  provides advisory and merchant banking services to asset managers,  to focus on deal activity in the space. With the alliance, the two firms provide cross-border advice to financial institutions, and has a specific focus on asset management M&A.

Financial services industry