Wealth Management Tag

Procyon Partners is honing in on its first deals following Constellation Wealth Partners taking a minority stake in the firm earlier this month, with one large RIA acquisition set to close by the end of the second quarter, and potentially another on its heels.

In an interview with WealthManagement.com, Procyon CEO and co-founder Phil Fiore detailed the firm’s goals in the wake of Constellation’s investment, saying the RIA intends to complete several transactions per year, earning cumulative M&A revenue between $8 and $20 million. According to Fiore, the firm would focus on firms with assets under management totaling between $300 million and $3 billion.

“But they have to be the right ones,” Fiore said.

The $8 billion Procyon Partners is based in Connecticut and part of the Dynasty Financial Partners network. Fiore co-founded the firm in 2017 after building prominent institutional consulting groups at Merrill Lynch and UBS. Earlier this month, Procyon announced Constellation’s stake, with Fiore calling it a “transformative moment” for the business. 

The capital from Constellation, a private equity firm founded by former Emigrant Partners CEO Karl Heckenberg, will help Procyon expand its talent pool and open new offices nationwide. Procyon will remain independently operated, which Fiore said was of paramount importance and limited the number of offers the firm received when it began seeking partners.

According to Fiore, the concept of a “strategic capital and thinking partner” was in Proycon’s business plan by year three, but the firm opted to meet with several private equity firms over several years to better understand what the PE space could offer it. 

Eventually, Procyon partnered with Houlihan Lokey to act as the firm’s investment banking advisor in the search. Last October, the firm sent out a confidential information memorandum to about 40 potential investment partners, getting 17 offers back and eventually meeting with five.

“The only reason why we didn’t get 40 back, quite frankly, is because of the size of the check. We didn’t want to sell a significant portion of the firm,” Fiore said. “It was always minority and always non-controlling.”

According to Fiore, Procyon didn’t pursue a minority investment from their back-office support partner Dynasty because “it’s really important, at some level, to have separation of church and state” (Fiore said the firm utilizes two custodians in Fidelity and Charles Schwab for the same reason).

While every potential PE partner promised capital and M&A deal flow proficiency, Fiore said Constellation’s differentiator was its advisory subset led by Lisa Crafford, Constellation’s managing director and head of advisory, who joined the firm from Pershing in 2023. 

Fiore said Crafford and other Constellation staff spent three days last week at Procyon conducting a deep dive and assessment of the firm, and intend to return in several weeks with a list of suggestions.

“So there’s a whole strategic consulting element relative to our infrastructure and our processes and how we’re doing things, how we’re executing and how we can be better,” Fiore said. “How do we fine-tune that? How do we make the Rolls-Royce even better?”

Fiore expected Procyon’s acquisitions in the months (and years) to come would be a mixture of expanding existing offices and planting flags in new cities and regions, citing Michigan; Columbus, Ohio; Chicago; and the state of Tennessee as potential locales. Particularly, Fiore found between the Mississippi River and the East Coast’s I-95 corridor to be fertile ground for a firm like Procyon.

“I just think as we start to go over the Mississippi and to that side of the country, we’ve just got to be thoughtful about making sure we build a larger complex,” he said. “If we’re going to hang a flag on that side of the Mississippi, we’re going to hang a real flag; I’m going to want to see $10 to $15 million in revenue out there.”

Fiore also acknowledged the difficulty of M&A at Procyon, which will likely limit the firm’s deal volume. He recalled how, 18 months after the firm’s launch, Procyon considered acquiring an unnamed large team that wanted to retain their own branding and create an affiliate relationship with Procyon. 

Fiore and his team opted not to make the deal, setting in stone the idea that firms would only join Procyon under the guise of being part of a single team, which Fiore acknowledged would not be for everyone.

“That business card is the same one I have,” he said. “It’s no different.”

Constellation Wealth Capital has staked its latest firm: Procyon Partners, an $8 billion RIA based in Connecticut and part of the Dynasty Financial Partners network.

Procyon CEO and Co-Founder Phil Fiore said in a statement that the deal was a “transformative moment” for the firm.

Constellation Wealth Capital “shares our commitment to client-first values, innovation and long-term partnership,” he said. “With their support, we’re positioned to accelerate our growth while continuing to deliver the exceptional, independent advice our clients have come to trust.”

The minority investment from Constellation, a private equity firm founded by former Emigrant Partners CEO Karl Heckenberg, will help Procyon expand its talent pool and open new offices in key markets nationwide. “Our focus has always been up and down the Eastern Seaboard,” Fiore told WealthManagement.com. “However, we think areas like Nashville, Chicago, Ohio and Texas are incredible geographies where we would be foolish not to consider hanging a flag, as there is some great talent in the independent space and in the wirehouses in those areas!”

Procyon Partners will remain independently operated after the deal, with continued support from Dynasty. Dynasty’s Investment Bank supported Procyon’s management team during the deal, while Houlihan Lokey acted as Procyon’s investment banking advisor.

The firm has offices in Connecticut, New York City, Long Island, N.Y., Tennessee and Maryland, focusing on institutional retirement consulting and private wealth management. The Constellation investment will also expand the

Fiore co-founded Procyon in 2017 with Dynasty’s assistance. Before going independent, Fiore had built prominent institutional consulting groups at Merrill Lynch and UBS. A team of UBS advisors, including Fiore, Jeff Farrar, Lou Gloria, Tom Gahan and Christ Foster, formed Procyon’s initial core.

In December, the firm hired Rich Franchella as a senior vice president of business development to help speed recruiting advisors in private wealth, institutional consulting, tax and risk management (Franchella was previously an advisor recruiter at Baird). 

Earlier this year, Procyon hired Mark Sullivan from UBS as a senior vice president and senior private wealth advisor in its Connecticut location. He managed $800 million in client assets and specialized in working with first-generation entrepreneurs.

Heckenberg founded Constellation Wealth in late 2023, aiming to take minority stakes in growing wealth management firms nationwide. Since forming, Constellation has made eight investments, including its first in AlphaCore Wealth Advisory and AITi Tiedemann Global, Avior Wealth Management, CV Advisors, Lido Advisors, Perigon Wealth Management, and Requisite Capital Management. 

Late last year, the firm took a minority stake in Cresset Asset Management, investing $150 million, representing less than 10% of Cresset’s total equity. In December, the firm also closed its inaugural fund with more than $1 billion in capital commitments. The Capital Fund partners included insurance companies, endowments, foundations, asset managers, and fund-of-funds.

A Connecticut RIA has accepted minority investment from Karl Heckenberg’s Constellation Wealth Capital.

Procyon Partners, an $8bn RIA, said Thursday that the deal with serial RIA investor Constellation will allow the firm to scale its operations and facilitate hiring.

Sources told Citywire in December that Procyon was in the market for a minority investor. Citywire also reported last month that Constellation Wealth Capital and Rise Growth Partners were in talks to invest in the RIA.

In seeking an investor, Procyon co-founder and chief executive Phil Fiore said he wanted help with strategic planning, including for future M&A. Fiore said his firm plans to acquire independent RIAs and pursue wirehouse liftouts.

‘Having a strategic thinker by our side who has been there done that, to have that sounding board when thinking about our evolution, is immensely important for us,’ Fiore said. ‘A lot of this is making sure we have capital to go out there and do really good deals.’

He said Procyon already has a few deals in the works, with a focus on expanding on the East Coast in the near term. Speaking further about his plans, Fiore said he hopes to bring services like accounting and insurance in-house, possibly via acquisition.

Procyon told the Securities and Exchange Commission (SEC) in a March filing that it counts more than 1,200 individuals as clients. Procyon also serves pension plans and businesses. The RIA reported a presence in New York City, Melville, N.Y. and Fulton, Md. According to Fiore, the firm has 60 employees and 13 partners.

The Shelton, Conn., RIA was launched in 2017 when Fiore and four other founding partners broke away from wirehouse UBS, where they had overseen more than $400m in wealth assets and $8bn for institutional clients. Dynasty Financial Partners supported their move and has provided the RIA with technology, compliance and other services ever since.

In a phone call, Fiore said he expects things to remain ‘business as usual’ with Dynasty.

‘We are excited to support Procyon Partners’ vision and momentum,’ Heckenberg, president and managing partner of Constellation, stated. ‘Their team has built a compelling, advisor-driven business with a clear growth trajectory.’

Heckenberg, who previously ran RIA investor Emigrant Partners, launched Constellation in late 2023, unveiling plans to take non-controlling investments in large and mid-sized RIAs. Constellation has invested in a handful of RIAs, including Lido Advisors, Perigon Wealth Management and Cresset.

Constellation closed a $1bn capital raise in December, with contributions from undisclosed insurance firms, endowments, foundations, asset managers and family offices.

Houlihan Lokey advised Procyon Partners on the deal. Dynasty said its investment bank also provided assistance.