Key Takeaways
- • Arax, a wealth management platform built by RedBird Capital Partners from the ground up rather than through acquisition, has grown to approximately $50B in assets and 230 financial advisors.
- • RedBird's stated philosophy is to be a "partner of choice, not an acquirer of choice," with advisors helping shape capabilities, retaining client control, and sharing in enterprise equity value.
- • Haig Ariyan (CEO of Arax) and Mike Zabik (partner at RedBird Capital Partners) discuss PE-backed wealth economics, including EBITDA multiples above 20x for certain businesses, leverage risk for large consolidators, and exit timing.
- • The discussion highlights the underdeveloped opportunity of direct wirehouse team liftouts by PE-backed firms, with Ariyan viewing transition execution as equally important as recruiting.
- • Both executives point to growth in ultra-high-net-worth wealth management and AI-driven advisor productivity as key forward opportunities.
Summary
Arax and its private equity backer RedBird Capital Partners have built a wealth management platform from scratch rather than acquiring an established RIA, according to a podcast conversation hosted by Jason Diamond of Diamond Consultants. Rather than buy a platform and then hire a manager, RedBird sought an experienced operator to build with, which led it to Haig Ariyan, a veteran executive whose prior roles included leadership positions at Alex. Brown and Raymond James. The resulting firm combines the resources, infrastructure, and capital of a large financial institution with the flexibility and entrepreneurial culture of an independent firm. Arax now manages approximately $50B in assets across 230 financial advisors.
The partners frame their model around the principle of being a "partner of choice, not an acquirer of choice." For Ariyan, this means advisors help shape the capabilities they use, retain control over client relationships, and participate meaningfully in enterprise equity value. For Zabik, it means investing in people, prioritizing organic growth alongside acquisitions, and resisting business decisions driven by a predetermined private equity exit timetable.
The conversation also addresses the economics of PE-backed wealth management. Zabik argues that certain businesses can justify EBITDA multiples exceeding 20 times, while leverage complicates the outlook for the largest consolidators. The discussion further covers the eventual return of investor capital and what advisors should understand about it. Both executives also note that relatively few PE-backed firms have successfully recruited wirehouse teams directly, a gap Ariyan attributes partly to the importance of transition execution.
Looking ahead, the partners cite increasingly complex client needs, the growth of ultra-high-net-worth wealth management, and AI tools that expand advisor capacity as areas of opportunity. The episode frames the Arax model as an illustration of how capital partnerships can shape the business advisors build and the value they create.
The partners frame their model around the principle of being a "partner of choice, not an acquirer of choice." For Ariyan, this means advisors help shape the capabilities they use, retain control over client relationships, and participate meaningfully in enterprise equity value. For Zabik, it means investing in people, prioritizing organic growth alongside acquisitions, and resisting business decisions driven by a predetermined private equity exit timetable.
The conversation also addresses the economics of PE-backed wealth management. Zabik argues that certain businesses can justify EBITDA multiples exceeding 20 times, while leverage complicates the outlook for the largest consolidators. The discussion further covers the eventual return of investor capital and what advisors should understand about it. Both executives also note that relatively few PE-backed firms have successfully recruited wirehouse teams directly, a gap Ariyan attributes partly to the importance of transition execution.
Looking ahead, the partners cite increasingly complex client needs, the growth of ultra-high-net-worth wealth management, and AI tools that expand advisor capacity as areas of opportunity. The episode frames the Arax model as an illustration of how capital partnerships can shape the business advisors build and the value they create.
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