PE shop Rosemont stakes $4.5bn New York multi-family office

Landmark Management has sold a 40% stake to Rosemont to help the firm’s founder execute an internal succession plan.

Private equity firm Rosemont Investment Group has acquired a 40% stake in Landmark Management, a New York-based multi-family office that oversees about $4.5bn in non-discretionary client assets.

Specific financial terms of the transaction, including the valuation given to Landmark, were not revealed. The deal closed last Wednesday.

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Landmark was founded in 1997 by ex-investment banker Earl ‘Trip’ Samson III and his wife Allyson Samson as Compton Capital Partners. The firm, which rebranded as Landmark in 2005, recommends investments and offers tax, accounting and recordkeeping services for ultra-wealthy families. It employs around 30 people.

The minority sale facilitates an internal succession plan and ownership transition for the Samsons. It’s a common problem for RIAs, and one that has driven M&A activity throughout the industry in recent years: a founder or principal wants to pass ownership and control down to next-generation leaders before retiring, but the firm’s value has grown such that the successors can’t afford to fully buy out their equity. This can create a tough situation for both buyer and seller.

‘Many times, there are disagreements on price,’ said Rosemont managing director Brad Mook. ‘The seller wants a market price and the next generation doesn’t have the resources and also feels like they’re putting in sweat equity, so they want a discounted price.’

‘What we do as minority investors is we come in and we’ll give you a more commercial price for a piece of the equity. You continue to transition internally at a bit more of an internal multiple, and we can be a supportive outside partner, but we’re not looking to run the business,’ Mook explained.

 About five years ago, the Samsons picked out their successors from within Landmark’s ranks. The three-person leadership team will be led by co-managing partner Danny Graham, a manager research and due diligence head who left Bear Sterns & Co. in 2008, around the time of the firm’s failure during the financial crisis, to join Landmark. Trip Samson said he and Allyson have sold about 18.5% of their equity in Landmark to the trio equally over the last five years.

‘They still owed us a fair amount of money for those stock purchases,’ Trip Samson said. ‘This is sort of a bridge to enabling more sales to the next generation.’

The plan, if approved by the compensation committee of the board of directors that will be set up after the Rosemont deal, is for the Samsons to incrementally sell their ownership in Landmark down to 20% – a stake they plan to keep within the family indefinitely.

Trip Samson said that he and Allyson sought a capital partner that would help ensure the firm’s longevity for multi-generational clients without pressuring them to change their methods or culture.

‘We were looking to find an equity source that could be the foundational source of our capital structure on a permanent basis,’ he said. ‘Think about the families we serve. They need this to go on forever. (Rosemont) has a long history of being a minority partner, so they’re used to that role.’

Rosemont, backed by speciality insurance provider Markel Corp. and led by chief executive Chas Burkhart, takes non-controlling equity interests of 10% to 40% in wealth and asset management companies and specializes in solving management or ownership-related issues for its portfolio firms. It historically operated like a standard private equity firm, making investments through funds with five- to seven-year time horizons, but recently pivoted to a ‘permanent capital’ approach.

‘We have no need for liquidity or an exit event and that changes our partners’ perspective in terms of the role that we play in the future,’ Mook said. ‘It also means that we can be patient and we don’t have to sell, we don’t have to force a return within a certain time period.’

Samson said this style was a perfect fit for Landmark’s needs, which was more important to him and Allyson than the valuation earned through a transaction. ‘Rosemont paid a fair price, but nowhere near what we were being offered by some others,’ he said.

Landmark is Rosemont’s second RIA investment since adopting the permanent capital model. In 2022, it acquired a 25% stake in Veris Wealth Partners, an impact investing-focused RIA with about $2bn in client assets under management. In 2021, the firm sold its 32% interest in $28bn Cleveland-based RIA and OCIO provider Clearstead to private equity firm Flexpoint Ford. Clearstead was one of the last RIAs Rosemont held through its fund structure – its final active fund is expected to expire in 2025.

DLA Piper served as Landmark’s legal advisor in the transaction, while Cozen O’Connor represented Rosemont.

Source: CityWire

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