Stifel Financial Corp. (NYSE: SF), the investment bank known for snapping up regional rivals and Wall Street castoffs, agreed to buy Eaton Partners to add ties with hedge funds, private-equity firms and high-net-worth family offices.
Financial service deals have been picking up in the middle-market lately. Financial Engines Inc. (Nasdaq: FNGN) is buying the Mutual Fund Store LLC from Warburg Pincus and Investcorp is purchasing Ssaris Advisors LLC’s hedge fund of funds division. Financial services remains one of the areas where dealmakers expect to see an expansion in M&A, according to Mergers & Acquisitions Mid-Market Pulse, a forward-looking sentiment indicator derived from monthly surveys of approximately 250 executives published in partnership with McGladrey LLP.
Eaton works with more than 4,000 institutional investors, and has raised $25 billion for funds in the past five years, St. Louis-based Stifel said in a statement Monday that didn’t disclose terms. Stifel said the purchase will expand its investment-banking and wealth-management operations, which now accounts for more than half of the firm’s revenue, according to data compiled by Bloomberg.
The transaction marks Stifel’s entry into fund placement, allowing it to win share after competing businesses shrank at Credit Suisse Group AG and UBS Group AG, and Blackstone Group LP spun off a unit this year. Chief Executive Officer Ronald Kruszewski has made more than two dozen takeovers since he’s taken charge in 1997, including the acquisition of rival brokerage Sterne Agee and Barclays Plc’s U.S. wealth-management operation in 2015.
“Charlie Eaton and his team are placement experts with a large investor base and a track record of success,” Kruszewski said in the statement. “We look forward to expanding our core advisory business and leveraging direct placements with our high-net-worth platform.”
The Eaton deal will help the investment bank advise middle- market clients on raising capital in both public and private markets, Stifel Co-President Victor Nesi said in the statement.
Eaton was advised by Freeman & Co. Securities and Debevoise & Plimpton LLP. Stifel was represented by Dechert LLP. The transaction is expected to be completed in January, according to the statement.