Private equity is stepping up its investment in the wealth management sector, drawn by its fragmentation, tightening regulations and the growing need for scalable platforms. This surge has been reflected in a string of deals, with PE Hub reporting 10 transactions since the start of 2025.
The wealth sector remains highly fragmented, with many smaller firms struggling under regulatory requirements and succession planning challenges, Callum Pirie, a director in Houlihan Lokey’s fintech group, told PE Hub. “Larger players, often with private capital backing, have the opportunity to consolidate these markets in the short term, generating significant value accretion in the process.”
Private equity has already played out this strategy in the US, pushing valuation levels to the higher end, Pirie said. “We are increasingly seeing US-based PE looking to Europe to find relative value in the wealth management market, which is driving competition for high-quality European assets.”
Delivering sustainable organic growth remains a key driver of value, Pirie added. “Firms are beginning to think more holistically about how to deliver this from both an operational and technological perspective, we expect this to become an even greater area of focus.”
Despite equity market volatility, there has not been a “marked slowdown” in the sector activity, he said. “In reality, the most educated investors in the wealth market have accepted that they need to be comfortable with equity market volatility.”
In the UK, increasing scrutiny from the Financial Conduct Authority as a result of Consumer Duty is driving businesses to really focus on the value of the service they provide to all clients, he added. “Many are having to look inward for a period of time to ensure their propositions are aligned to the FCA’s guidance, and clients are getting the services they pay for. To some extent, this is taking up senior bandwidth that would typically be directed towards pursuing acquisitions.”
Amid all this, organic growth remains a challenge, he said. “… wealth managers are having to become smarter in how they attract both new clients to the platform and growing the share of wallet they advise on from their existing client bases.”
Here are the 10 deals announced in the sector, starting with the most recent.
1. RedBird Capital-backed Arax picks up Schechter Investment Advisors
RedBird Capital Partners portfolio company Arax Investment Partners acquired Schechter Investment Advisors, the RIA business of Schechter, a Birmingham, Michigan-based wealth advisory and financial services business in early June.
Arax is a wealth and asset management platform.
2. IK makes first platform deal in Ireland with Kestrel Capital
IK Partners agreed to invest in Kestrel Capital, an Irish investment management and financial planning company, alongside the current owners of Kestrel in late May.
Dublin-based Kestrel provides services to high-net-worth individuals, family offices,…
Read More: Private equity accelerates wealth management consolidation: 10 deals
