Lido CEO Ken Stern Sees Opportunities Abroad
Could Lido be the next U.S.-based registered investment advisor to buy a firm abroad?
Ken Stern, co-chief executive officer of wealth management firm Lido Advisors, speaking on stage at Wealth Management’s recent RIA Edge Orange County conference, said that international expansion was a real possibility for his firm and should be on the radar for others.
“It’s super smart,” Stern said of international expansion. “I mean, obviously, the United States and several components of the United States are money centers. But we’re not everything.”
“How do you not think about the Mideast? How do you not think about Europe in several aspects? How do you not think about Asia? How do you not think about Mexico City?” Stern asked rhetorically. “There are incredible opportunities to bring all that together.”
Stern acknowledged that pursuing cross-border deals requires an appetite for navigating different regulatory jurisdictions, but suggested the potential rewards make the complexity worthwhile for firms willing to take it on.
“We’re a growth firm,” he said, adding that it would be “short-sighted” for him to tell Lido’s board that the company would focus on just one region or type of opportunity. “I think that we’ve reached a point that we can run all over the world.”
Should Lido acquire a firm abroad, it would follow in the footsteps of only a few RIAs that have made international deals.
Earlier this year, Creative Planning completed its first international acquisition with Baseline Wealth Management, which has locations in Geneva and Zurich, 14 employees, and more than $1 billion in AUM.
Last year, Miami-based Corient expanded into Europe to drive growth by acquiring two U.K.-based wealth managers overseeing a combined $214 billion in assets.
Most recently, Wealthspire has acquired two firms in the U.K., including Atlantic Swiss, a London-based boutique wealth management firm with $1 billion in assets and some 20 employees.
Yet Stern made it clear that, while Lido will take a more measured approach to M&A than some other RIAs with a faster dealmaking cadence, organic growth remains the firm’s top priority, and dismissed concerns that there is too little opportunity for a firm of Lido’s size to meet organic growth goals.
“I’ll concede the fact that … it gets harder to scale from a $200 billion company than it does for a $10 billion company. What I don’t agree with is that any of us in this room have come anywhere close to any kind of maturation, or any kind of slowdown in the potential.”
While the industry might grow net new assets around 5% to 6% annually, “I gotta tell you, I think that’s entirely too low. We are in an age of abundance when it comes to wealth. We have every factor lined up for us,” he said, including the ongoing generational wealth transfer and the increased recognition of multi-service wealth advisory. “Even if you grew to the $500 billion number … we don’t even move the needle 1% in the addressable market.”
