Targeting market leading companies
in high growth, high return on
capital industries.

Business Description

Edelman Financial Engines (“EFE”) is a wealth management platform for mass affluent households and workplace 401(k) retirement plans

Background And Source

Lee Equity evaluated numerous brokerage, advisory, and wealth management opportunities, which would benefit from a thesis that the industry would continue to shift to fee-based, independent financial advice. The Lee Equity team had a longstanding relationship with the holding company management team of EFE, who shared this thesis, and Lee Equity ultimately partnered with EFE management in a proprietary take private transaction.

Investment Thesis Highlights

• Experienced management team
• Large, growing and underserved mass affluent market
• Differentiated customer value proposition: Low cost, customer-friendly and academically sound money management proces

Post-Investment Value Creation

• Divested Non-core Assets: Drove the sale of three non-core assets/business units including Other Wealth Management, which later merged with WealthTrust to create Affiliated Wealth Partners, a Lee Equity Partners Realization Fund, L.P. portfolio company
• Expanded marketing: Diversified marketing campaigns into digital and TV channels and hired first Chief Marketing Officer 
• Upgraded Analytics to Drive Metrics-based Decision Making: Built various analytical tools to evaluate lead attribution and planner capacity; built monthly report to evaluate key financial performance indicators; launched marketing and AUM metrics tracking software
• Accelerated Organic Growth: Rapidly grew asset and client base through hiring new planners and opening new branch locations

Exit Summary

On December 18, 2015, Lee Equity Partners sold EFE to a private equity firm, Hellman and Friedman. Lee Equity retained a minority position and board seat to capitalize on future growth. In December 2021, Lee Equity Partners exited the EFE investment.