CAPTRUST

CAPTRUST identifies independent advisory practices with strong retirement-plan or wealth-management books, often approaching them through a dedicated mergers-and-acquisitions team. The firm targets practices with cultural alignment and a desire to offload operational burdens in exchange for equity in the broader holding company. Deals are typically structured with a mix of cash and stock, allowing founders to monetize their life's work while continuing to grow under the CAPTRUST platform.

CAPTRUST primarily functions as a discretionary and non-discretionary consultant and investment advisor rather than a direct asset manager. For retirement plans, it often serves as a 3(38) investment manager or 3(21) fiduciary, selecting and monitoring investment options on plan menus but outsourcing to third-party asset managers for the underlying funds. In wealth management, the firm constructs portfolios using external managers, ETFs, and individual securities.

In 2023, GTCR invested as a minority shareholder in CAPTRUST to provide capital for continued acquisitions and operational expansion. The investment does not change the firm's client-facing structure, and the founding partners remain in control of the business. GTCR's capital serves as a permanent funding vehicle to accelerate the consolidation strategy without relying on incremental practice-revenue financing.

The firm typically charges a fixed fee or an asset-based advisory fee, disclosed in plan documents, which can be paid by the plan sponsor or allocated to participant accounts depending on the arrangement. CAPTRUST does not accept 12b-1 fees, soft-dollar arrangements, or revenue-sharing payments from mutual-fund companies in its institutional retirement business, which it positions as a structural conflict-of-interest advantage.

Under ERISA, a 3(38) investment manager assumes full fiduciary responsibility for selecting and monitoring the plan's investment menu, shifting liability away from the plan sponsor. CAPTRUST uses this designation as a central part of its value proposition for institutional clients, giving it discretion over investment selection and the authority to replace underperforming funds without sponsor approval.