Industry veterans Jim Dickson and Mark Penske have launched a new wealth management investment firm, Elevation Point, bankrolled by a group of family offices and with the intention of acquiring minority and majority stakes in middle-market advisors with between $200 million and $3 billion in assets under management.
As part of Minneapolis-headquartered Elevation Point’s overall strategy, the first acquisition, announced today, was the purchase of Mount Yale Capital Group, a provider of outsourced investment management to a network of affiliated advisors with an aggregate of $3.4 billion in managed assets.
“One thing I’ve learned the hard way is flying a plane while you’re building it is really hard,” said Dickson, a founding partner and CEO. “We wanted to do this first acquisition so we have an OCIO, we have a back and middle office that we can scale into.”
The big differentiator between Elevation Point and other advisory firm acquirers is that the capital comes from family office investment in the firm, Dickson said, not through a private equity fund structure that has a defined lifespan of about 10 years. There will be no pressure to exit its acquisitions on a pre-determined timeline to return capital to investors, he said.
“While there’s been a lot of good that came with private equity into the industry, it’s becoming a bit more conflicted, a bit more focused on short-term profits,” he said. “We want to do something a little different that had a longer time horizon, a different shot clock.”
Structurally, Elevation Point is an operating company in which the family offices are investors.
Dickson said the focus on the middle-market for advisory firms is intended to help Elevation Point capitalize on some aspects of that segment that align well with the firm. “We think that’s where we can add the most value,” he said. “First, that’s where most RIAs lie. There’s about 4,000 of them, so it’s a big enough market.”
Second, he said, it’s the advisory segment where a lot of firms need help after growing as large as they can on their own. “They’re ready to take that next step and they’re looking for a partner to help them do that. It might be capital, it might be technology, it might be subject matter experts, whatever their constraint is,” he said.
And third, it’s not a crowded market, he said. “If you look at this space and you look at a lot of the announcements, it’s $3 billion, $5 billion. And very crowded,” he said. “And so for us, wanting to do right by our shareholders, we just like that middle-market space. We think there’s breadth, depth, an opportunity to truly help. And we think the valuations are more reasonable.”
Elevation Point will focus on two specific groups of advisors: RIAs seeking to join and grow with a larger firm, and breakaway wirehouse advisors. In both cases, the firm will offer its new partners services such as outsourced customizable investment management, and back- and middle-office solutions, technology and support services specifically for the needs of high-net-worth clients.
“The firm’s partnership growth model features strategic investments, commencing with a minimum 20% investment for independent firms, alongside access to its industry-leading advisor support tools and services,” a press release said.
The firm expects to soon launch Alt:62, a private investment network consisting of partner firms, Elevation Point and global family offices. Alt:62 will enable Elevation Point’s partner firms to give their clients access to private investment opportunities not seen elsewhere, the press release said.
This is not Dickson’s first go at building a firm that supports advisors seeking independence. In 2018 he founded Sanctuary Wealth, which was private equity funded and grew to $25 billion in AUM among 76 partner firms by the time Dickson left the firm in 2023, the press release said.
Dickson’s departure had been somewhat abrupt, as he was fired by the board of Sanctuary Wealth after allegations of misconduct, which Dickson has denied. According to Dickson’s BrokerCheck page, he was terminated for conduct not “in accordance with the requirements of his employment contract and his duties and obligations as CEO.”
Prior to founding Sanctuary, Dickson spent 19 years at Merrill Lynch, and before that worked at Ernst & Young, the press release said. Sanctuary's network of reps included a heavy representation of former Merrill executives and advisors formerly affiliated with the giant wirehouse.
Sources familiar with Sanctuary said the firm's board believed he had misappropriated company resources. A Sanctuary spokesman said, "As we stated in February 2023, Jim Dickson was terminated for cause by the board and beyond this, Sanctuary has no comment."
Dickson also had no comment on the incident.
Penske is the founder and chairman of United Atlantic Capital, a privately owned financial services holding company in New York.
“Through the launch of Elevation Point and our acquisition of Mount Yale, we've combined the agility of a startup with the expertise of a renowned investment firm,” he said in the press release. “Mount Yale’s commitment to independence and dedication to the highest standards align seamlessly with our vision, enabling us to uniquely offer partner firms access to a high-end investment and wealth management platform from day one.”