For years, private equity (PE) has dominated the RIA transaction landscape. In 2024, PE-backed buyers were involved in 89% of RIA transactions, according to Fidelity, up from 43% in 2016. But as the largest PE-backed platforms continue to grow, some RIAs are reaching a scale where traditional PE alone can no longer meet their capital needs.
This is a natural progression. As valuations rise and firms move up the sponsor ladder, the number of PE sponsors capable of underwriting the next stage of growth narrows. For RIAs, the next logical sources of capital are sovereign wealth funds (SWFs) and large insurance carriers — institutional investors with deeper pockets and, in many cases, more patient capital.
We have already seen this play out. In 2024, Singapore’s GIC took a minority stake in Mercer Advisors. That same year, the Abu Dhabi Investment Authority and PE firm Advent International made a combined $3 billion minority investment in Fisher Investments. Also in 2024, Abu Dhabi’s Mubadala Capital announced a take-private transaction for CI Financial.
Insurance companies have made similar moves. In 2022, Guardian Life acquired a minority equity stake in HPS Investment Partners and deepened that partnership in 2024 by committing up to $5 billion in new capital and shifting roughly $30 billion in assets to HPS’ management. In 2025, Northwestern Mutual acquired a minority equity interest in Sixth Street while committing $13 billion in assets for Sixth Street to manage.
These are early indicators of where the market is heading. An IPO market for RIAs has not developed, which is not unusual at this stage of the consolidation cycle. Until it does, firms at the top of the PE ladder will increasingly look to SWFs and large insurance carriers as the next source of growth capital.
How Deal Structures Change With SWFs And Insurance Carriers
When an SWF or insurance carrier enters a transaction, the deal mechanics differ from PE, and the two bring distinct considerations to the table. PE funds operate on defined cycles, often a five to seven year holding period for any particular investment, and that timeline shapes everything from earnout structures to governance provisions.
SWFs do not carry those constraints. There is no cycle end requiring a liquidity event. Deals involving sovereign capital feature longer investment horizons, less exit pressure and fewer downside protections. Simply put, sovereign capital is more structurally patient money.
When an SWF or insurance carrier enters a transaction, the deal mechanics differ from PE, and the two bring distinct considerations to the table.
Insurance carriers also offer a longer time horizon than PE. While sovereign patience is structural, insurance carrier patience can be more strategic and permanent, sustained by the business synergies the investment is designed to unlock. Insurers are drawn to wealth management given its adjacency to insurance product distribution, retirement income planning and risk management.
Their investment may include integration expectations, such as embedding proprietary products within an RIA’s platform or connecting the firm to existing distribution networks. The importance of those strategic objectives can influence how the relationship evolves over time.
This distinction matters in negotiations. A sovereign wealth investor is generally underwriting the firm’s standalone growth, while an insurance carrier may be underwriting that growth plus the synergies it expects across its broader platform. Those expectations are likely to shape governance terms, post-closing obligations and daily operations.
In practice, SWF investments are often co-investments rather than outright acquisitions. These are not buyouts, but capital partnerships where PE partners contribute operational expertise and SWFs provide long-term stability and eliminate the pressure of a forced exit. Insurance carriers can also participate in these types of partnerships, though their capital is typically accompanied by strategic objectives, such as expanding distribution, retirement capabilities or product offerings.
Governance expectations evolve accordingly. SWFs typically seek board representation or observer rights, but not operational control. Insurance carriers may place greater emphasis on commercial arrangements, such as distribution partnerships or other strategic collaborations, that align with the investment’s long-term objectives.
The RIAs Most Likely To Attract Non-PE Capital
SWFs and large insurance carriers are not writing checks to firms seeking their first or second capital partner. These types of investors are focused on firms that have already scaled the PE ladder and demonstrated material growth. To attract serious consideration, a firm likely needs to be among the largest in the industry, with an enterprise value that can absorb a meaningful institutional investment.
To attract serious consideration, a firm likely needs to be among the largest in the industry.
But size alone is not sufficient. These investors want strong leadership with succession planning, operational maturity and a demonstrated ability to integrate acquisitions and retain advisors. A firm dependent on a single founder presents a different risk profile than one built for long-term continuity.
For insurance carriers, there is an additional consideration of strategic fit. An insurer will evaluate how well an RIA’s client base and service model align with its own distribution strategy. For example, a firm with deep expertise in retirement income planning or holistic financial planning may offer strategic advantages that extend beyond financial returns.
What RIA Owners Should Think About As The Buyer Pool Expands
For most owners, SWFs or insurance investment is not an immediate consideration. But the firms that will eventually attract this capital are the ones growing now. Stagnation narrows options at every level; the winners show consistent growth, make disciplined acquisitions, and build organizations not dependent on any single individual.
The firms that will eventually attract this capital are the ones growing now.
Reputational considerations differ by capital source. SWFs are backed by foreign governments, some from regions carrying geopolitical sensitivities, though in practice this has not materially affected deal activity. Insurance carriers carry different nuances. Clients may question whether an insurer’s involvement will influence advice or push proprietary products. In both cases, owners should be prepared to address client and stakeholder questions.
The RIA industry’s consolidation story is far from over. Capital sources are evolving, and SWFs and insurance carriers will play an increasingly prominent role. The firms that continue growing organically and scaling the PE ladder will have the widest options when the next growth opportunity arrives.
Corey Kupfer is the Founder and Managing Partner of Kupfer., PLLC.
