Envestnet said that the acquisition will enable RIAs to more efficiently deploy integrated wealth-management solutions.
“A rapidly growing number of advisors seek a fully-integrated platform, one that provides a wide array of investment products and outsources back-office operations,” said Jud Bergman, Envestnet’s chairman and chief executive officer. “Tamarac made its reputation by supporting independent RIAs with best-in-class portfolio-management and rebalancing solutions. Together we will deliver a broad, integrated platform that empowers advisors to improve client outcomes, efficiently scale their business, and enhance client support.”
Tamarac, which was founded in 2000, has relationships with more than 500 RIA firms, which collectively manage over $250 billion in assets. Stuart DePina, Tamarac’s CEO, will become group president of Envestnet-Tamarac and continue to manage its efforts to help independent RIAs streamline their businesses.
The acquisition is Envestnet’s third since December. In April, it completed its acquisition of Prima Capital, which provides investment manager due diligence, research applications, asset allocation modeling and multi-manager portfolios to the wealth management and retirement industries, now known as Envestnet-Prima. In December, Envestnet bought FundQuest Inc., the Boston-based turnkey asset management program provider.
In connection with the Tamarac deal, Envestnet has established a management equity incentive plan for certain members of Tamarac’s management who will join the management team at Envestnet-Tamarac. The plan involves approximately 1.024 million shares of Envestnet common stock. Under the plan, Envestnet may distribute up to $7 million of the shares at pre-established intervals, but in no event later than May 15, 2015, based upon Envestnet-Tamarac meeting certain financial targets. In addition, at the closing of the acquisition of Tamarac, members of Envestnet-TamaracTM management used a portion of the proceeds they receive from the acquisition of Tamarac to acquire shares in, and options to acquire, Envestnet common stock.
The recipients of these shares and options are generally restricted from exercising the options or disposing of the shares for a period of two years from the grant date.