Lead Investor Hellman & Friedman to Remain Majority Shareholder; Warburg Pincus to Acquire Minority Ownership and Join Board
Boston, MA. – March 15, 2021 – Edelman Financial Engines (“the Company” or “firm”), the nation’s top independent financial planning and investment management firm, along with lead investor Hellman & Friedman, a premier private equity firm focused on making large-scale equity investments in high-quality growth businesses, today announced a strategic investment from Warburg Pincus, a preeminent global private equity firm focused on growth investing, which will become a minority equity owner and Michael Martin, Managing Director, will join the Company’s Board of Directors.
The investment values the Company at $7.3 billion and is expected to close in the second quarter 2021.
This recapitalization marks a significant milestone in fulfilling a vision that has long been in the making for the Company and its investors. In 2015, Hellman & Friedman’s investment in legacy Edelman Financial Services helped that firm become the leading independent financial planning and investment advisor in America. That same year, Financial Engines began to combine its technology-based offering in the workplace with a more comprehensive, high-touch and advisor-led approach, and brought Warburg Pincus on as a significant investor as part of that transition. In 2018, Hellman & Friedman’s strategic take-private of Financial Engines and merger with Edelman Financial Services accelerated that journey, creating the top independent RIA in America, recognized three years in a row by Barron’s. Since the merger, Edelman Financial Engines has continued to expand and enhance its service offering, growing AUM by nearly $100 billion, while always acting in the best interest of its nearly 1.3 million clients. The Company’s strong financial performance in 2020 demonstrated the strength and resiliency of the firm. With the backing of Hellman & Friedman and Warburg Pincus, the Company enters its next phase of growth grounded in its unwavering mission to bring more financial help to the many that need and deserve it.
“This new investment from Warburg Pincus alongside the continued support from Hellman & Friedman demonstrates the abundance of opportunity ahead for our business,” commented Larry Raffone, President & Chief Executive Officer, Edelman Financial Engines. “Our record growth in 2020 created momentum that has continued into 2021. We are well-positioned and excited to take advantage of the opportunities in front of us and to fulfill our long-term vision of helping more Americans meet all their financial goals.”
“We are very proud of the progress that the Edelman Financial Engines team has made since we merged Edelman Financial Services with Financial Engines in 2018, creating an unparalleled investment advisory business that provides millions with access to high-quality, unbiased financial planning-led advice,” commented Allen Thorpe, Partner, Hellman & Friedman. “We are excited to continue working with Larry and team as they seek to protect and enhance the financial wellbeing of so many Americans, and we look forward to partnering with Michael and the Warburg Pincus team. They bring great expertise in the financial services industry and will be a great addition to the Board as we support the Company’s bright future together.”
“We have a strong history with Edelman Financial Engines and are thrilled by this opportunity to invest in its continued growth in partnership with Hellman & Friedman,” said Michael Martin, Managing Director, Warburg Pincus. “We believe that the Edelman Financial Engines business model, which spans workplace retirement plan advice and traditional financial planning and investment management services, uniquely positions the firm to help millions of Americans reach their financial goals.”
Moelis & Company LLC acted as lead financial advisor to Edelman Financial Engines. PJT Partners also acted as a financial advisor, and Simpson Thacher & Bartlett provided legal counsel. Wachtell, Lipton, Rosen & Katz provided legal counsel to Warburg Pincus.
About Edelman Financial Engines
Since 1986, Edelman Financial Engines has been committed to always acting in the best interest of our clients. We were founded on the belief that all American investors – not just the wealthy – deserve access to personalized, comprehensive financial planning and investment advice. Today, we are America’s top independent financial planning and investment advisor, recognized by Barron’s1, with 150+ offices across the country and entrusted by more than 1.2 million clients to manage more than $260 billion in assets.2 Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every client’s situation and goals are unique, and the powerful fusion of high-tech and high-touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves.
About Hellman & Friedman
Hellman & Friedman is a preeminent global private equity firm with a distinctive approach focused on investments in high-quality growth businesses. H&F seeks to partner with world-class management teams where its deep sector expertise, long-term orientation, and collaborative partnership approach enable companies to flourish. Since its founding in 1984, H&F has raised over $50 billion of committed capital, invested in over 90 companies, and is currently investing its ninth fund, with $16.5 billion of committed capital. Learn more about H&F’s defining investment philosophy and approach to sustainable outcomes at www.hf.com.
About Warburg Pincus
Warburg Pincus LLC is a leading global private equity firm focused on growth investing. The firm has more than $58 billion in private equity assets under management. The firm’s active portfolio of more than 195 companies is highly diversified by stage, sector, and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 19 private equity funds, which have invested more than $89 billion in over 920 companies in more than 40 countries. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore. For more information please visit www.warburgpincus.com.
1 The 2020 America’s Best RIA Firms Independent Advisory Firm Ranking issued by Barron’s is qualitative and quantitative, including assets managed, technology spending, staff diversity, succession planning, the size and experience of teams, and the regulatory records of the advisors and firms. Firms elect to participate but do not pay to be included in the ranking. Investor experience and returns are not considered. The 2018 ranking refers to Edelman Financial Services, LLC, which combined its advisory business in its entirety with Financial Engines Advisors L.L.C. (FEA) in November 2018. For the same survey, FEA received a precombination ranking of 12th.
2 Data as of 12/31/2020.