Two Pennsylvania-based registered investment advisors are merging to create a $9 billion RIA combining an institutional-focused firm with a predominantly wealth management business.
BilkeyKatz Investment Consultants, which works with institutional clients with assets ranging from $20 million to $1 billion, and Oakmont Capital Management, which has about $650 million in assets under management, will combine under the legal entity Oakmont Capital Management. According to Patrick Fisher, partner and head of consulting services, BilkeyKatz will continue to do business under that name, with no visible change for clients.
Fisher said Pittsburgh-based BilkeyKatz, which advises on over $8 billion in institutional assets, also has a small family trust and family office business. Meanwhile, Oakmont, Penn.-based Oakmont is focused on wealth management, with some business with smaller institutions.
The idea of merging the firms came up over lunch, during which Fisher discussed with former colleague and friend John Koteski how the rising costs of software and database use were cutting margins.
“That led to conversations between both firms, and ultimately led to us merging,” Fisher said.
Koteski left a job at Yanni Partners, where Fisher also worked, to launch Oakmont in 2002. The move “shocked” Fisher then. But Koteski eventually built Oakmont up to nine employees, some of whom joined from BilkeyKatz. He will be CEO of the newly combined RIA.
“The merger reflects a shared commitment to a fiduciary standard and objective investment advice,” Koteski said in a statement. “It further enhances our ability to design and implement what we believe to be tailored investment solutions for a client base that spans the country.”
Darrin Duda, who had also worked at Yanni Partners before joining BilkeyKatz, will be a partner and chief investment officer.
Fisher said the new firm will continue to look for client growth among families and institutions, including foundations, endowments and corporate retirement plans. The merger will also allow BilkeyKatz to offer discretionary investment management and an OCIO model.
“It opens us up to some growth,” Fisher said. “The trend has been away from traditional nondiscretionary consulting and toward that OCIO-type model.”
Terry Bilkey and Jerry Katz founded BilkeyKatz in 2002. The firm is employee-owned, and Fisher said it expects to remain that way after the merger, which will be finalized Oct. 1.
“Our goal is to always be employee-owned,” he said. “We have no interest in getting outside investors, especially from private equity. We know that can really change the culture and change a lot from within the organization.”
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