2 Pilot-Focused RIAs Form $500 Million Firm

Abstract

First came the big airline mergers. The combined firms also serve commercial pilots from United Airlines, Delta Air Lines and American, according to an announcement, helping them with retirement and pre-retirement planning.

First came the big airline mergers. Now two Dallas RIAs that focus on airline pilots have combined as well.

Smith Anglin's acquisition of Rhoads Lucca creates a firm with $500 million in client assets, serving clients in 45 states and creating a “one-stop shop” for pilots, says Smith Anglin cofounder Steve Anglin. The firm will continue to use the Smith Anglin name, and plans to retain all Rhoads Lucca employees.

Anglin says his firm already called itself “the leading provider to active and retiring Southwest airline pilots” -- but that the merger gives his firm a relationship with other airlines. Rhoads Lucca advisors "have a presence in the FedEx market, which is one we didn’t have, as well as with US Airways,” he adds.

The combined firms also serve commercial pilots from United Airlines, Delta Air Lines and American, according to an announcement, helping them with retirement and pre-retirement planning.

WEIGHING OPTIONS

Rhoads Lucca took more than a year to find the right partner, according to the statement. The goal was to find the right fit for its traditional base of active and retired pilot clients as well as for a branded retirement program that it manages: the Autopilot 401(k).

The cofounders of Rhoads Lucca considered deals with 10 regional and national RIAs, including consolidators, the statement said. 

“I cannot stress enough how important it was to us to find the right fit for our practice -- important for our clients, for our employees and for ourselves,” John Rhoads, partner at Rhoads Lucca, said in the statement.

“We outlined a set of criteria that was challenging, to put it mildly,” Rhoads added, “and frankly the choice we made in the end would have appealed to me even if I planned on remaining with the business for another 10 years, versus retiring in one.”

Smith Anglin’s tax planning proficiencies and the fact that both firms deploy a defensively oriented investment strategy made the combination appealing, according to the statement.

This is Smith Anglin’s first acquisition.

Rhoads Lucca used Mill Valley, Calif.-based mergers and acquisitions consulting firm Advice Dynamics Partners, which serves middle-market financial advisory firms, to find the right alliance.  “Ultimately it boils down to people,” Advice Dynamics CEO David Selig said in the statement. “The financials are important, but you need to find the right compatibility at a human level. It’s really high-stakes matchmaking.”

Read more:

 

Credit: By Ann Marsh