Q&A: Adam Dooley on His New Wealth Management–Focused SPAC

Everest Consolidator Acquisition Corporation, the special purpose acquisition company targeting the wealth management industry, started trading on the New York Stock Exchange last week under the ticker symbol MNTN.U. The company closed its initial public offering on Monday, at a price of $10 per unit, raising a total of $172.5 million. BofA Securities served as the bookrunner on the deal.

Adam Dooley, the founder and CEO of private equity firm Belay International and former head of wealth management at MetLife Europe, filed for the SPAC IPO in October, with the hope of raising $150 million to invest in independent financial advisory firms and wealthtech companies.

Related: New Wealth Management SPAC Aims to Raise $150M in IPO

Dooley said the IPO was five and a half times oversubscribed. He now has 21 months to find a target for investing the proceeds, per the rules around SPACs. He’s not looking for companies with owners looking to cash out and leave the business; on the contrary, he’s targeting owners and managers who want financing to grow an existing business.  

“Even though acquisition is in the name, this is very much a platform and a tool for the CEOs and founders of these leading edge businesses to accelerate their growth,” Dooley said, in an interview with WealthManagement.com. “It’s not a private equity takeover. Our intention is to leverage the team we assembled to take a board seat and help these CEOs and founders scale their companies and develop these new business models.”

Dooley recently chatted with WealthManagement.com about the profile of firms he’s looking for and what the SPAC structure has to offer the independent advice industry.

WealthManagement.com: Why do you think the IPO had so much traction?

Adam Dooley: I think there’s a recognition from the institutional investor community that this space, it’s not only high growth, but it’s a recurring revenue model. This is one of the original subscription-based recurring revenue models based on advice and very high retention rates, client centric, and that recognition I think has increased the demand.

WM: What is the ideal profile of the firm you are targeting for acquisition? Would you be looking at aggregators/consolidators or technology vendors?

AD: We’re looking at the wealth management space in its entirety. So within that space, we’re very focused on independent fee-based advice and the technology that supports it.

And that comes in lots of different flavors. There’s the multifamily offices that work with ultra-high-net-worth individuals. And there are some incredibly talented teams that have built very successful businesses there. In the independent broker/dealer side equally, there’s some very talented people running some excellent organizations that are very focused on growing out their fee-based advice platform. And then of course, the RIA consolidators, which gets so much of the attention because it’s such a fragmented industry, that are working with the mass affluent and high-net-worth individuals.

And that’s what I read about every day in the media, but what’s less talked about is what do these businesses look like in 10 years? And they’re not going to look like they look today. And the leading edge businesses are the ones that are putting clients first, all of their constituents, the employees, their communities. They’re really forward-thinking in the sense of building sustainable business models and incorporating ESG—not just for the economics of it, but that’s what their clients are demanding.

COVID kind of catapulted the whole industry forward 20 years. And I say that because there’s always been this recognition that in 20 years, as Gen X gets into their 60s and 70s, they’re going to be able to deliver advice via videoconference. But when everybody was under lockdown, the only way baby boomers could see their grandkids was figure out how to do Zoom. So now this entire generation of people is totally comfortable using Zoom. And I think that also is a game-changer because it gives these businesses the ability to scale even more rapidly. That’s a huge difference in using these digital tools.

So it’s not so much firms that we want to acquire. We’re looking for one person or a group of people that we can partner with and essentially become a catalyst to help them accelerate their growth. And the way they’re going to do that is through a public listing. So if we can provide that path for that individual or group of individuals running one of these organizations, I think having that public currency allows them to build this new business model, which quite frankly hasn’t been created yet. There’s people with that vision, but it’s not fully built out.

I think CI Financial’s doing a great job. They’re publicly traded. They’re really building a new business model that’s focused on fee-based advice, client centric, and there are firms that are private that have the same ambitions and that same future vision where they have a digital advice platform for their younger people, there’s a hybrid advice platform where maybe you don’t have a dedicated manager, but you have a qualified professional you can validate your decisions with.

WM: What does a firm get out of the deal with Everest? Do they get growth capital? Are they getting stock ownership? Are they getting long-term incentivization plans?

AD: One single firm forms the platform. That company lists. The first thing it does is it gives them growth capital, and it gives them a public currency in the form of a publicly traded stock. They can use that publicly traded stock to, one, hire even more talented people into their organization. It gives them a higher profile, higher visibility. They can use that public currency to then do more bolt-on acquisitions to evolve their business.

And the other thing that we can bring them is a really deep network and sounding board.

Peter Scaturro is an example. He’s our lead independent director. Peter was instrumental in growing U.S. Trust and then selling it to Bank of America. He ran Goldman Sachs’ private wealth management business. He scaled public organizations as the CEO.

The other thing these firms need as a publicly traded company is the board governance. Elizabeth Mora, who’s our audit chair, was CFO at Harvard University for 10 years. She worked with the Harvard Endowment. She’s a CPA by training. She worked in PwC’s regulatory practice. Once a firm goes public and they’re having to close out their books each quarter, it requires systems and processes in place and board governance from a financial perspective to be able to do that, and she knows how to implement that.

The other piece is marketing at an institutional level and also to mass affluent clients. Jacqueline Shoback did that at Fidelity. She’s worked at Boston Private. She also has a venture firm that’s focused on digital identity. And that, by the way, will allow us to compress that client onboarding cycle, that online authentication piece. I think she can be incredibly helpful there.

From a strategic advice perspective, Anil Arora, who was on the board of Envestnet up until recently, is an advisor at The Tifin Group, which is really shaping the future of investor experiences through these digital technology tools. And he’s a fintech pioneer.

I started my career as a private client advisor at Smith Barney with a $1 billion team in the early ’90s. So I’ve seen how this industry has evolved. I have marketed investment products, whether they’re alternative investment managers, traditional asset managers, protected investments and structured notes. I have marketed those products through every channel in the U.S., Canada, Europe, and have had some exposure in Japan and Asia. So there’s a team here that understands and has the same view of the world, and I think that’s helpful.

We’re searching for people that want to go through another financing round. So people that have a company they want to sell and walk away from, that is not our target. We want a founder, a CEO who has the ambitions to become one of the leaders in this industry.

WM: Do you anticipate having some sort of like centralized platform or operational platform for firms to use, wealth management firms to use?

AD: We as Everest are not looking to become like a Focus Financial and consolidate all these firms. Once we find that ambitious CEO/founder that wants to accelerate their organization, they will merge into Everest, and the Everest name will go away and no longer exist.

But what we don’t want is somebody that says, “This is great. I’m ready to cash out. Let me hand the keys over to you and you guys run this business.” Absolutely not. We want someone that says, “I can grow and scale globally. I’ve built a great business here in the U.S. I want to expand into other product categories. I want to acquire new businesses. I want to acquire businesses of tech platforms, portfolio management reporting, digital advice, eventually expand into the UK, Australia, Canada.”

How do you do that? You need a lot of capital, not just tens of millions, not even hundreds of millions, you need billions. And the only way you can get that is through a public listing and trade your company on the stock market. So depending on which company we partner with, that’s what we’re providing them. We ourselves are not going to operate this business.

WM: Will you make just one acquisition?

AD: To clarify that, the founders of the business will continue to run the company and maintain control. The Everest team will serve as a trusted consultant to the CEO, helping them develop their strategic growth plans and successfully implement the governance systems to manage a public company. The shareholders of Everest will keep a small minority stake in the public company, which we anticipate to be in the low single digits.

We’re just simply a listing vehicle for that company to get to the markets quickly, create a trading price, make their name higher visibility. They’re now a publicly traded entity. The Everest name goes away, disappears, and the new publicly traded company is the name of this company that’s now listed. That company and their management team, they will decide what acquisitions are made. They’ll decide what the future path of that company looks like.

WM: What type of wealthtech providers are you looking at?

AD: Well first off, we’re looking at companies that we believe have a valuation of at least $1 billion. Within the wealthtech space, I think there are a group of companies that provide portfolio management and reporting, some that do the whole end-to-end solutions that fit that valuation metric. Some of them may have an enterprise value of $4 and $5 billion.

But our focus is truly on the RIA consolidators, the multifamily offices, the independent broker/dealers. And then they can go out and acquire these other businesses. Not only can they accelerate their M&A activity that already exists where they’re consolidating RIA groups, but they also can look at building out their own business as this new publicly traded entity.

WM: What’s the next step?

We have a total of 21 months to find a target. We have a very targeted list of people that we believe have the ambitions to scale their companies, and they have great businesses. And we’re going to start to approach those teams and have conversations to see if we view the world the same way they do and have conversations about taking them public.

This conversation has been edited for length and clarity.