In a stunning transfer, Nice Grey introduced the acquisition of RPAG, a number one 401(okay) apply administration platform for retirement plan advisors. In keeping with an organization assertion, “RPAG will proceed to function underneath its model and management.” Individually, RPAG cancelled its nationwide convention, which it has held for the previous 30 years, in addition to different regional occasions.
Claiming to have $1.2 trillion belongings underneath “affect,” 120,000 plans and 10 million contributors, RPAG has broad attain into advisory corporations and repair suppliers. Representatives from Nice Grey, RPAG and flexPATH declined to remark, though they issued a press release acknowledging the transaction.
There are extra questions than solutions, together with which employees members will go along with RPAG and which is able to stick with flexPATH. It seems that Nick della Vedova, the longtime RPAG president, shall be a part of the Nice Grey deal, whereas Vince Giovinazzo, co-founder and CEO, will doubtless stay at flexPATH.
The acquisition is shocking as a result of Nice Grey, RPAG and flexPATH, are all owned by Madison Dearborn Companions. It’s uncommon {that a} non-public fairness agency consummates a transaction between portfolio corporations, and it’s curious why they moved RPAG to Nice Grey relatively than maintaining it with flexPATH.
In 2023, Madison Dearborn, which owned NFP, lifted out flexPATH and RPAG after which what’s now Nice Grey, previously Wilmington Belief, a significant CIT supplier centered on the advisor offered 401(okay) market with $209 billion of belongings in 765 funds, from M&T Financial institution led by Nice Grey CEO Rob Barnett. Madison ultimately offered NFP to Aon in 2024.
The histories of all these corporations mirror a lot of the timeline of the RPA trade and maybe supply a glimpse into the long run.
Giovinazzo and ultimately della Vedova shaped 401kAdvisors within the Nineties, promoting to NFP nearly 20 years in the past and creating RPAG and flexPATH alongside the best way. They had been one of many unique RPA aggregators, together with Captrust, Sageview and what’s now Hub, began by Invoice Chetney and now led by Joe DeNoyior. OneDigital’s Vince Morris and World Insurance coverage’s Troy Hammond had been with NFP at one time.
M&T Financial institution, which acquired Wilmington Belief in 2011, started specializing in the RPA market in 2013 underneath Barnett, which partnered in 2015 with flexPATH and Blackrock, led by Dick Darian, on their goal date collection. flexPATH is approaching $90 billion total and is among the solely multimanager DCIOs.
So why did Madison Dearborn transfer RPAG from flexPATH underneath Giovinazzo to Nice Grey underneath Barnett?
NFP Advisors, with near $140 billion of DC belongings, and RPAG have been highly effective distribution channels for flexPATH. Even after separating from NFP, flexPATH advisors continued to make use of their funds, which is able to doubtless additionally proceed with RPAG underneath Nice Grey. Gross sales and distribution haven’t been Nice Grey’s energy, lately shifting exterior wholesalers internally, leading to attrition. RPAG could possibly assist funnel belongings to Nice Grey’s companions, who presently account for over $120 billion, whereas persevering with to work with flexPATH.
Madison doubtless didn’t think about promoting RPAG to a 3rd get together due to its distribution worth for Nice Grey and their fund companions. They may have gotten a better value from a third-party sale benefiting restricted companions that personal flexPATH however not Nice Grey in addition to worker shareholders.
The historical past of those corporations displays most of the main traits affecting the RPA world right this moment;
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Although the RPA consolidation continues, scale will not be sufficient
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RPAs and document keepers want extra sources of income from:
• Individuals monetary planning and wealth administration
• CIT co-created merchandise
• Managed accounts -
DCIOs want various distribution sources, which multi-manager corporations like flexPATH and now Nice Grey supply
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Cheaper CITs, as soon as solely out there to bigger DC plans, at the moment are accessible to even the smallest plans with advisory corporations and document keepers negotiating deep reductions leveraging their total e-book of enterprise
What’s the long run? Comply with the cash.
