In the “Behind the deal: Why Pathstone bought $4bn RIA Cornerstone” article by Citywire, Pathstone’s President Matt Fleissig and Cornerstone Advisors’ CEO Ken Hart share their views on why the two RIA firms are a perfect match in the pending acquisition.
The first meeting Cornerstone Advisors took with a prospective buyer last winter was with multi-family office Pathstone.
Cornerstone, a $4bn RIA based in Bellevue, Washington, had decided it needed to raise capital in anticipation of partner retirements.
While Cornerstone ended up speaking with ‘lots’ of prospective buyers throughout the process, Ken Hart, the firm’s chief executive, said they found that they kept comparing all the firms to Pathstone.
‘Pathstone became the reference point, the benchmark and high-water mark, so we were thrilled the way it ultimately came back to that,’ Hart said. ‘But it was important to go through the process because we didn’t know what we didn’t know.’
For Matt Fleissig, president of Pathstone, it was ‘love at first sight.’
‘The more people at Cornerstone we met, the more we just said: “Wow, wow, wow,”’ Fleissig said. ‘If we tried to hire these individuals, we would not have been able to find them.’
Working in Pathstone’s favor was its quick climb beyond $15bn in assets under advisement, through what Fleissig called a pretty even mix of organic and inorganic growth, in just 10 years. Fleissig also had Pathstone’s 10-page service matrix and its promise for joining firms to expand their scope of services for clients to dangle as a carrot.
‘The term “family office” is used a lot in the industry, but there are actually very few true family offices providing the services involved,’ Fleissig said. ‘There was an immediate recognition with Cornerstone that our businesses could naturally come together.’