Southwestern Investment Group, a Franklin, Tenn.-based hybrid advisory firm with more than 60 advisors and approximately $5.8 billion in assets, announced that Merchant Investment Management has taken a non-controlling, minority stake in the firm. The terms of the deal, which closed in November, were not disclosed.
Along with Merchant, SWIG’s management team and key advisors also purchased all outstanding equity interest from parent company Southwestern Family of Companies, a deal announced in December. Merchant provided capital to become a minority investor, as well as credit facilities for principals and their advisors to purchase their shares, paving the way for its advisors to participate in equity ownership.
As the firm splits off from Southwest, it will launch a new name and brand later in the year, and has hired Optima Group to help with that process.
“We are incredibly grateful for the time we spent as part of the Southwest family of the company,” SWIG CEO Jeff Dobbins said in a statement regarding RIA’s separation from Southwest. “It was the foundation that allowed us to grow and thrive all these years. Although this is the time of a new phase in our journey, we will always remain true to our roots as part of this family.”
SWIG was founded in 2002, and has grown to over 60 consultants serving 13,000 clients from its offices in Tennessee, Alabama, Texas, Iowa and Nebraska. From 2020 to 2021, RIA grew its AUM by 34%.
Matt Brinker, Merchant’s Managing Partner, said RIA has a unique approach to developing young talent. Instead of hiring experienced career changers or mentors with an existing book of business, SWIG brings in new advisors in their 20s and gives them the opportunity to learn alongside experienced mentors in a two-year mentoring program.
“They are incredible at recruiting and cultivating young mentors and growing their mentor base systematically,” Brinker said. “It’s a bit of a unicorn, where it’s a business that’s biased toward young mentors, growing organically, not really focused on any M&A yet, although it That’s something we’ll definitely integrate into the growth strategy—and it’s in a great market.”
The firm uses Raymond James Financial Services as its broker/dealer.
The deal follows reports in December that the private advisory group, Morristown, NJ-based RIA and the supervisory jurisdiction’s office affiliated with LPL Financial, had taken on Merchant as its first outside investor. CEO RJ Moore said the investment was the first step toward launching an equity program for its advisors.