Private equity is steadily encroaching on the RIA industry’s middle market, as PE-backed firms now own nearly one-quarter of the industry’s total assets in that segment.
According to a new analysis from AdvizorPro, as of July 2025, 81 RIAs with under $1 billion in assets under management are private equity-owned, a 30.6% increase from 62 year-over-year (many of these fall under PE-backed aggregators).
Industry-wide median AUM for PE-owned firms declined 5.6% from 2024, suggesting that PE is moving downstream from the most prominent RIA players. Meanwhile, the total number of PE-backed firms grew 16% from 255 to 295.
According to Brendan Kawal, a principal with Advisor Growth Strategies, private equity’s strategy stems from firms that begin with AUM as low as $1 billion that successfully grow into $20 billion firms (and even larger). He said private equity may now want to be “closer to the origin story” of when these firms first started building out.
“It’s a little riskier, of course, because it’s less proven,” Kawal said in an interview with WealthManagement.com. “But there’s also higher absolute upside in those businesses than if you’re going to be the next sponsor for one of the more established platforms that are in the space.”
To create the report, AdvizorPro examined SEC Form ADV filings for over 7,800 SEC-registered RIAs through the middle of the year, looking at ownership records for private equity involvement (while excluding RIA firms operating only as asset managers or in a non-advisory capacity). However, AdvizorPro noted that their analysis was limited to firms retaining a separate ADV filing, even though smaller firms can be acquired and “fully absorbed into existing PE-backed platforms.” Therefore, the “true level of consolidation—including tuck-ins and absorbed entities” is likely even greater than the report indicates.
According to the report, the total AUM under PE-owned firms grew from $5.23 trillion to $5.97 trillion, a 14% jump year over year. Though private equity owns only 3.7% of firms, it controls approximately 23% of all $100 million-plus RIA assets.
In addition to the established PE players, Kawal said the middle market was also targeted by what he called the “specialist investors” (who are PE-backed or private equity themselves), whose size parameters differ from large-market private equity. Firms like Joe Duran’s Rise Growth Partners are aiming directly at the middle market, where they feel they’ll find the greatest success.
Kawal also noted that large-market space has grown increasingly inaccessible, as some firms may be priced out of the larger opportunities altogether, based on their access to capital and other factors. For example, Kawal cited this week’s “huge transaction” involving PE firm Madison Dearborn Partners buying Aon’s wealth businesses (Wealthspite Advisors, Fiducent Advisors and Newport Private Wealth) for $2.7 billion.
“You have to be at a certain magnitude and have a certain appetite to be able to do things like that,” he said. “For others, it might be like, ‘that’s not a real opportunity for us. We’ve got to go after something a little bit more manageable on the investment size.”
The debate over private equity’s role (and ongoing impact) on the RIA space is waging among advisors and in C-suites. At last month’s Echelon conference, Creative Planning CEO Peter Mallouk said he expects the RIA industry to evolve into a future of “four to 12 really big players.”
In a discussion with Echelon founder and CEO Dan Seivert, Mallouk also argued that strategic acquirers, as opposed to PE-controlled firms, will have a leg up in the race toward consolidation (though Creative Planning has PE funding from TPG Capital and General Atlantic, Mallouk is the majority owner).
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