MAI Capital Management has purchased a $600 million Cincinnati RIA in a bid to expand its geographic reach, MAI managing partner Rick Buoncore, says.
The deal took “over a year” for Cleveland-based MAI to put together the deal to buy John D. Dovich & Associates and “is evidence MAI is executing on its planned growth strategy,” Buoncore, says.
Buoncore tipped his hand in April that MAI Capital Management had two acquisitions planned for the summer of 2019 off the back of buying a $100 million Akron, Ohio-based practice.
In June MAI Capital Management announced the acquisition of $400 million Virginia-based RIA MTX Wealth Management, which caters to professional athletes and entertainers.
Sitting down with FAIQ, Buoncore outlines what John D. Dovich & Associates purchase means for MAI, which advises on $5.4 billion.
Q: What does the acquisition of John D. Dovich & Associates mean for MAI’s growth strategy?
A: The advisors of John D. Dovich & Associates are like minded, like hearted people who give us the opportunity to go into a new market in Cincinnati. They also give us the opportunity to go into the insurance line too — not in terms of selling insurance, but using it as a solution for our clients’ estate and tax planning needs. Think of the deal as a vertical integration. We will have an MAI insurance solution as a service offering.
Simply said, this acquisition is evidence that we are executing our planned growth strategy. We find advisors that have the same philosophy and view clients the same way we do, and add them to MAI. MAI values taking care of clients, its advisors, and the community. And in the case of John D. Dovich & Associates, John Dovich, the firm’s president is very prominent philanthropically in Cincinnati. You will see more deals coming over the next few years that match MAI’s values.
Q: How did the acquisition of John D. Dovich & Associates come together?
A: This is a great example of how our partnership with Wealth Partners Capital Group, a minority stakeholder in MAI, works. Wealth Partners has an in-house M&A team of about 12 people that are constantly trying to identify potential deals for MAI. The team went into the Cincinnati market and found a bunch of firms that could be potential fits for us, and we narrowed it down from there.
From the moment we met John Dovich we knew John D. Dovich & Associates was our target.
Q: Why is gaining scale significant for MAI’s plans?
A: Having more scale is significant in so many ways for MAI. We all have the same operation and technology costs, and when you can spread that over a larger base the percentage you pay is better for everyone. It also gives MAI buying power. With larger scale, MAI can get better pricing on investment solutions, as well as access to opportunities in private equity and real estate before smaller firms.
Q: What will happen to John D. Dovich & Associates’ advisory team following the acquisition?
A: John will be the regional managing director of the Cincinnati region for MAI. And the firm’s two younger partners, Tom Lalley and Bill Bruns, will go on to become partners of MAI.
*This interview have been edited for both brevity and clarity.