Alternative asset manager Ares has taken a notable step into the registered investment advisor space by acquiring a minority equity stake in EP Wealth, a Torrance, California-based RIA overseeing approximately $40 billion in assets under management. For EP Wealth, this investment marks an important milestone in its broader capital-raising strategy as the firm pursues accelerated mergers and acquisitions activity. For Ares, it represents its first publicly announced equity investment in an RIA, expanding beyond its prior role as a debt provider to wealth management firms.
Ryan Parker, CEO of EP Wealth, emphasized the cultural alignment between the two organizations. “We are thrilled to have found a partner in Ares who fully supports our mission and will fortify our efforts to grow while sustaining the governance, passion, and culture on which EP Wealth is built,” Parker said.
Although specific terms of the transaction have not been disclosed, the deal is expected to close in October. EP confirmed that its leadership structure will remain intact, with co-founders Derek Holman and Brian Parker retaining significant ownership and continuing in their roles. This assurance underscores the firm’s intent to balance outside capital with continuity of vision and leadership, a point many wealth advisors consider essential when evaluating strategic partnerships or capital infusions.
Leveraging Debt for Growth
In tandem with the equity infusion from Ares, EP is also raising additional debt to further fuel its expansion. According to S&P Global, the firm recently announced plans for a $400 million, seven-year term loan along with a $100 million five-year revolving credit facility. EP intends to use the proceeds both to pay down existing debt obligations and to fund upcoming acquisitions.
Credit rating agencies have weighed in on the financing package, providing important context for advisors evaluating the risks and opportunities of EP’s strategy. S&P assigned EP Wealth a “B-” rating, highlighting its history of steady organic growth while flagging potential revenue limitations from its fee-only business model. Moody’s issued a “B2” rating, citing EP’s strong growth trajectory but pointing to earnings sensitivity tied to broader financial market conditions. Both ratings fall below investment grade, reflecting the leverage profile that often accompanies acquisition-driven growth.
For RIAs observing this transaction, these credit ratings serve as a reminder of the trade-offs in financing strategies. Leverage can significantly accelerate scale, but it comes with increased scrutiny and heightened execution risk, particularly in volatile markets where fee-based revenues fluctuate alongside client asset levels.
A Highly Acquisitive RIA
EP Wealth has emerged as one of the most active consolidators in the independent wealth management industry. In 2025 alone, the firm has already completed eight acquisitions, with more transactions expected to close by year-end. This rapid pace places EP firmly among the industry’s most aggressive acquirers, supported by its national footprint spanning 54 offices across 19 states.
The firm’s scale and deal activity have earned it industry recognition, including a No. 13 ranking on Barron’s Top 100 RIA Firms list for 2025. That visibility reinforces its positioning as a preferred partner for independent advisors seeking either a succession solution or additional resources to better serve clients in an increasingly competitive environment.
For many advisory teams, EP’s approach illustrates how joining forces with a larger platform can provide both liquidity and infrastructure advantages while preserving elements of independence. The addition of Ares as a financial backer will likely bolster EP’s ability to compete for quality firms as acquisition targets.
Why Alternative Asset Managers Are Moving Into Wealth
The Ares-EP Wealth transaction highlights a broader trend reshaping the wealth management landscape: the growing involvement of alternative asset managers and private equity firms in the RIA sector.
Historically, private equity has played a central role in funding RIA consolidators, providing capital for acquisitions, technology investment, and advisor succession planning. Now, large alternative investment managers like Ares are extending their reach beyond debt structures into equity ownership. This shift reflects both the stability and long-term growth potential that RIAs represent, particularly as more investor wealth flows into fee-based advisory relationships.
For advisors, this influx of capital has two primary implications. First, it increases competitive pressure within the M&A market, as firms backed by institutional capital can outbid smaller players for acquisition targets. Second, it introduces new potential paths for advisors contemplating their own succession or liquidity options. Partnering with a consolidator backed by deep-pocketed investors often enables retiring advisors to monetize their equity stakes while ensuring continuity of client service.
That said, advisors also need to weigh the cultural and operational trade-offs that come with outside investment. While capital can accelerate growth and innovation, it may also influence firm strategy, compensation structures, and decision-making processes. EP’s emphasis on maintaining independent leadership and founder ownership highlights an effort to balance these dynamics.
The Strategic Appeal of RIAs to Institutional Investors
From the perspective of Ares and other alternative asset managers, RIAs offer a compelling investment thesis. Independent wealth firms operate in a sector characterized by steady, recurring revenues, strong client retention, and secular growth trends fueled by demographic shifts and rising demand for fiduciary advice. Compared with more volatile segments of financial services, RIAs present a relatively predictable revenue stream tied to client assets under management.
Furthermore, consolidation opportunities remain robust. The RIA industry is still highly fragmented, with thousands of small to midsize firms operating independently. For institutional investors, this fragmentation creates an environment where scaled platforms can achieve meaningful efficiencies and competitive advantages. By backing acquisitive firms like EP, investors gain exposure to the consolidation wave while capturing long-term value creation through synergies, cross-selling opportunities, and expanded distribution capabilities.
Implications for Advisors and the Broader Industry
For wealth advisors and RIAs watching these developments, the key question is what this means for practice management and client relationships. The growing role of institutional capital suggests several industry shifts that advisors should monitor closely:
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Acceleration of Consolidation: Capital-backed firms are likely to dominate deal-making, creating fewer but larger players. Independent advisors may face pressure to either scale or specialize in order to compete effectively.
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Technology Investment: Outside capital often fuels substantial investment in digital platforms, data analytics, and client experience enhancements. Advisors may benefit from access to improved tools, but they must also adapt to evolving operational models.
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Succession Pathways: For advisors nearing retirement, consolidators with institutional backing can offer attractive monetization options. However, advisors should carefully evaluate cultural alignment and client impact before pursuing such a transition.
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Leverage and Risk: As firms like EP take on more debt to fund acquisitions, their stability becomes more sensitive to market conditions. Advisors affiliated with these firms should remain attentive to the potential risks that accompany leveraged growth models.
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Client Perception: High-profile partnerships with alternative asset managers may reassure clients about a firm’s financial strength. At the same time, clients may have questions about how outside investors influence decision-making and long-term priorities. Advisors need to be prepared with clear messaging to address these concerns.
Looking Ahead
The partnership between Ares and EP Wealth underscores how capital markets and wealth management are becoming increasingly interconnected. For Ares, this investment represents both a diversification play and a bet on the durability of the RIA growth story. For EP, it provides both capital flexibility and strategic validation as it pursues ambitious expansion goals.
For independent advisors, the deal serves as a case study in the evolving role of capital in the RIA industry. The presence of alternative asset managers is no longer limited to the periphery—it is becoming a central feature of the industry’s structure. Whether viewed as an opportunity or a challenge, the reality is that institutional capital is reshaping the competitive landscape.
Advisors who stay informed about these dynamics will be better positioned to make strategic decisions for their own practices. Whether considering a sale, a merger, or remaining fully independent, understanding how capital flows are influencing the market is now an essential part of long-term planning.
The story of EP Wealth and Ares is still unfolding, but it provides a clear signal: the consolidation wave in wealth management is far from over, and the role of alternative asset managers is only growing stronger. Advisors who grasp these trends and anticipate their impact will be better equipped to chart a successful course for their businesses and their clients in the years ahead.
