Focus Financial Partners is diversifying into the family office business with the acquisition of a major stake in New York-based Flynn Family Office, an advisory firm that was spun out of KPMG following the giant accounting firm’s purchase of another CPA firm, Rothstein Kass.
The firm is headed by CEO Rick Flynn, who began building the multifamily office at Rothstein Kass 13 years ago. It offers a suite of sophisticated tax, accounting and risk management services for wealthy individuals, most notably entertainers.
Terms of the transaction were not disclosed.
“Focus gave us the opportunity to stay independent,” Flynn said. “The time was right to separate.”
Flynn is one of a handful of firms attempting to capitalize on the growth of family offices outsourcing various services. Other family office-type firms looking to capitalize on the growth of this business include Tiedemann Wealth Management in New York, Arlington Family Offices in Birmingham, Ala., and Pathstone in Fort Lee, N.J.
Rajini Kodialam, managing director and co-founder of Focus, anticipates that there may be significant synergies between Flynn’s firm and other RIAs in the Focus network. “Rick’s business is unique,” she says. “He serves a fairly unique clientele and he is very good at it. Many of his clients are the 1 percent of the 1 percent.”
Flynn Family Office’s specialties include accounting and risk management services for hedge fund general partners and popular musicians who may go on a 35-city tour in more than 20 states, where they end up owing taxes and needing to purchase insurance in each separate venue.
However, the firm’s clientele includes other wealthy individuals with specialized needs, including entrepreneurs who have experienced liquidity events. These are “services some of our other [Focus] partners” might want to use, Kodialam says.
Flynn says his firm already shares several clients with other firms in the Focus network.
Moreover, since Flynn doesn’t offer asset management services and works with an extremely affluent client base—it recently started a division for billionaires—Kodialam thinks the multifamily office might want to use the money management services of other Focus partners.
Kodialam says that Focus was introduced to Flynn four years ago by Bill Loftus, a principal at LLBH, a Westport-Conn.-based firm whose principals left Merrill Lynch in 2008. Since LLBH went independent that year, its asset base has grown from $400 million to nearly $1.6 billion.
Started in 2006, Focus owns equity interests in 31 advisory firms managing more than $70 billion.
