$4B Credent Sells Minority Stake to Crestline

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Credent Wealth Management, a $4 billion registered investment advisor headquartered in Auburn, Ind., has sold a minority stake to Crestline Investors, an alternative investment manager and lender.

The move from Fort Worth, Texas-based Crestline adds to $50 million in debt financing it made in July 2024 to Credent. That financing helped the RIA nearly double its assets under management. 

Crestline now joins the other 50 employee/owners in Credent, who are all part of the same shareholder class, a staple of Credent’s model, according to CEO and co-founder David Hefty.

“How do you take all of these fiercely independent entrepreneurs and make all of them work together?” Hefty asked. “The answer for us was a single economic class with full transparency. ... That was the secret sauce, and that has become a stake in the ground for us.”

Hefty said when Credent was exploring other stakeholder options with investment bank support from Ardea Partners, the equal shareholder setup was non-negotiable. 

He also said Credent insisted on remaining a fee-only advisory, something he said is being eroded by private equity capital, which pushes firms to adopt fee-based models with proprietary or commission-based products.

Crestline, which has about $20 billion in AUM, will continue to support recruiting and acquisition efforts for Credent, which has completed more than 13 deals since 2018 and has 14 offices in the Midwest, Oklahoma and Texas. The funding will also go toward technology and platform investments, Credent’s turnkey asset management program, and its buyout program for retiring advisors.

“If you’re going to be a succession planning firm, you better have a liquidity lever,” Hefty said. “This event with Crestline provided that liquidity that was needed for those exiting advisors on our capital table, and then also provides for investing in our profit interest partners.”

With the stake, Crestline Director Albert Hicks will get a board seat with the RIA.

“We are proud to deepen our partnership with a firm that we believe is well-positioned to support advisors in their mission, offering transparent economics, independence, and a clear path to ownership and succession,” Hicks said in a statement. 

Credent will also continue to put funding toward its TAMP, Credent Advisor Solutions. Hefty said the TAMP caters to late-career advisors looking toward succession, and is not a separate line of business meant for all RIAs.

“There are platforms for [breakaway firms],” he said. “We’re not one of them.”

Hefty co-founded Credent with his wife, Stacy, who serves as president. He focuses on mission, vision, culture and top-line revenue for the firm; Stacy’s core areas are execution of strategy, teams, process and client experience.

Hefty said the shared equity class was part of the core ethos for Credent’s founding as it brought together disparate RIAs. The firm views the setup as a draw for both senior advisors considering an equity swap to join the firm and next-generation advisors, who see it as a rare opportunity to be part of the same economic class as the founders.

“I will tell you that there was no shortage of negative feedback by private equity firms that we are being overly generous with our next generation,” he said. “Well, if you’re not, where does it go? It goes to just a handful of us here at the firm or the private equity firm. For those of us who actually put the money up to actually start and build a company, we know what it takes, and we know that if you don’t have the right people rowing hard in a single direction, the investment in itself may or may not materialize.”