Edelman Financial Engines (“EFE”) is a wealth management platform for mass affluent households and workplace 401(k) retirement plans
Background And Source
Lee Equity evaluated numerous brokerage, advisory, and wealth management opportunities, which would benefit from a thesis that the industry would continue to shift to fee-based, independent financial advice. The Lee Equity team had a longstanding relationship with the holding company management team of EFE, who shared this thesis, and Lee Equity ultimately partnered with EFE management in a proprietary take private transaction.
Investment Thesis Highlights
- Experienced management team
- Large, growing and underserved mass affluent market
- Differentiated customer value proposition: Low cost, customer-friendly and academically sound money management proces
Post-Investment Value Creation
- Divested Non-core Assets: Drove the sale of three non-core assets/business units including Other Wealth Management, which later merged with WealthTrust to create Affiliated Wealth Partners, a Lee Equity Partners Realization Fund, L.P. portfolio company
- Expanded marketing: Diversified marketing campaigns into digital and TV channels and hired first Chief Marketing Officer
- Upgraded Analytics to Drive Metrics-based Decision Making: Built various analytical tools to evaluate lead attribution and planner capacity; built monthly report to evaluate key financial performance indicators; launched marketing and AUM metrics tracking software
- Accelerated Organic Growth: Rapidly grew asset and client base through hiring new planners and opening new branch locations
On December 18, 2015, Lee Equity Partners sold EFE to a private equity firm, Hellman and Friedman. Lee Equity retained a minority position and board seat to capitalize on future growth. In December 2021, Lee Equity Partners exited the EFE investment.
Case studies have been selected for illustrative purposes only and should not be considered an offer or solicitation of services or an actual or implied endorsement of Lee Equity or any security, investment or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments. Please refer to the Portfolio page for a list of all Lee Equity investments since inception.
Initial InvestmentApril 2012
Key Transaction DatesSeptember 2015 Divestiture
December 2015 Majority Sale to Sponsor
December 2021 Final Exit