Merger boosts Armbruster Capital growth

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Armbruster Capital Management is one step closer to its goal of managing $1 billion in client assets. It has merged with Apex Advisors, creating a firm with more than $725 million in assets under management and placing it among the top money managers in the area.

Apex Advisors added $85 million in assets under management and 40 client relationships to the business. Armbruster Capital works with 350 clients. Financial details of the transaction, which closed in mid-December, were not disclosed.

Mark Armbruster

Among the biggest local investment advisers are Invesco Advisers Inc. – Rochester Division, Manning & Napier Advisors LLC and Merrill Lynch & Co. Inc., all with more than $10 billion in locally managed assets, according to the most recent Rochester Business Journal list of money managers.

“We are always trying to grow our firm, and generally we have had to do so organically, client by client,” says Mark Armbruster, president of Armbruster Capital. “We have explored M&A in the past, and even did a very small acquisition about 10 years ago, but generally it is impractical for us, given our low-fee schedule. So, while we weren’t looking for this, it sort of landed in our laps, and we were ready to go.”

Firms often are priced for sale based on a multiple of their revenue, he explains. 

“If the other firm charges a lot higher fees than us, we would pay way too much for the deal, assuming we cut client fees after we buy the other firm,” Armbruster says. 

He launched Armbruster Capital 12 years ago as a fee-only investment adviser. The independent, employee-owned firm, which works with individuals, institutions and 401(k) plans using strategies based on tested academic and quantitative research, appealed to Elizabeth Barrett, founder of Apex Advisors. As she mulled retirement, Barrett was on the lookout for a local firm that fit the bill.

“This merger combines two firms with strong backgrounds in bringing academically sound investment management at a reasonable price,” she says. “It will build bench strength and ensure continuity for my clients.”

The merged entity will retain the name Armbruster Capital Management. Armbruster will remain president, and Barrett will serve as a principal in the firm. Armbruster Capital has nine employees and is looking to add more in the future. Barrett is expected to work with Armbruster’s team for at least the next three years. 

Elizabeth Barrett

The merger is small enough for a quick and efficient integration, Armbruster says, and signals future growth.

“This merger continues the rapid growth we have achieved over the past 12 years,” he says. “However, we are most proud of the fact that Apex chose to partner with our company because of its confidence in our ability to live up to its high client-service standards. We have a unique investment philosophy and client-centric service approach that aligns well with Apex’s philosophy. We are also thrilled to have Beth Barrett join our team.”

For Armbruster Capital, joining forces with Apex Advisors is in line with its five-year plan to reach $1 billion in client assets. The business posted 38 percent in growth—roughly $200 million—in 2021.

“Originally it was a five-year plan that we put into place a year or so ago,” Armbruster says. “This really jump-starts that plan and gets us further down the path than we would have been on our own.

“We’ve seen our growth rate accelerate in recent years as we have gotten bigger. I think some of this is that we’re now on the radar for institutions (mostly local nonprofits) and also, we have a larger network of clients who refer us. So, we’re optimistic that while we just got $85 million in new growth, there will be a lot more to come as a result of the merger.”

Smriti Jacob is Rochester Beacon managing editor.

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