A $78B-AUM Multi-Boutique's M&A Strat Targets Four Areas
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Thursday, February 10, 2022

A $78B-AUM Multi-Boutique's M&A Strat Targets Four Areas

The chief of a publicly traded B-D's $78-billion-AUM multi-boutique asset manager arm is pursuing what he describes as "a very aggressive inorganic acquisition strategy" with four areas of focus.

Robert Daniel "Bob" Kendall III
Carillon Tower Advisers
"We'll be acquisitive without question," Bob Kendall, president of Raymond James' Carillon Tower Advisers [profile], tells MFWire.

Carillon currently has five wholly-owned boutiques and about 330 staff, Kendall confirms, with the team roughly fifty-fifty between Carillon on the one hand and the boutiques on the other. And, thanks to RayJay's impending purchase of a bank, Carillon is about to add a sixth boutique; that deal is expected to boost Carillon up to about 400 employees and $90 billion in AUM.

For future acquisitions, one area of interest for Carillon is fintech.

"It's really important, particularly as we're a provider of SMAs," Kendall says, citing direct indexing and tax-loss harvesting as being of particular interest.

Second, Kendall says he's interested in alts, both to institutional clients and to high-net-worth or "intermediated retail" clients (i.e. through financial advisors).

"I do see a great opportunity for us in terms of delivering alternatives," Kendall says.

Third, Kendall is looking overseas, both in terms of investment capabilities (he mentions emerging markets and international equity and fixed income) and in terms of distribution. (Carillon's parent, RayJay, recently bought a British B-D.)

"We see opportunities for our business to continue to move into Europe," Kendall says.

Fourth, Kendall expresses an interest in the impact investing space in areas like water, wind power, and more.

"We see great opportunities with institutional clients around impact," Kendall says.

When it comes to finding a good boutique match, there are several key factors for Carillon, Kendall explains.

"First and foremost, it's all about culture for us," Kendall says. "I want to make sure that they're going to be a really good cultural fit," both for Carillon and for RayJay.

Finding boutiques where Carillon can "add a lot of value," in terms of expertise and distribution, is another key factor, Kendall explains. He says he's looking for institutional boutiques looking to broaden their reach in the consultant, high-net worth, or retail FA channels.

"I want to businesses that can become the next boutique parts of Carillon," Kendall says, noting that boutiques keep their own portfolio managers, technology, and research. "We believe in independence and the value of it."

Kendall is open to making strategic minority investments in boutiques, too, at least at the beginning of a new boutique relationship.

"That's definitely on the table as we think about ways for us to grow," Kendall says. "Ideally, over time, we'll wholly own any affiliates that we bring onto the platform."

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