Advisers expanding into private assets are not only enhancing client outcomes but also boosting their firms’ market value and attractiveness for mergers and sales, driven by demographic shifts and institutional interest.
The push by registered investment advisers to expand client access to private markets is doing more than broaden portfolios: industry participants say it can materially lift a firm’s value in a sale or merger.
According to the original report from RIA Edge’s Private Markets conference, Patrick McGowan, managing director and head of alternative investments at Sanctuary Wealth, said the $16 billion RIA has leaned into private market investing and sees benefits in client lead generation, retention and wallet expansion that add to a firm’s market value. “I think you can reasonably, over a 10-year-period, go from about a 2.5x [multiple] to about a 3x just in the growth of the underlying assets of the firm due to market appreciation by making an investment in private markets,” McGowan said.
The rationale is both strategic and demographic. McGowan pointed to macro trends , a shrinking pool of public companies, market concentration among a handful of stocks and strong historical returns in areas such as private equity , but emphasised the $100 trillion intergenerational wealth transfer as a decisive factor in future flows. “I believe that, and based on the conversations we have internally, that the heirs will ditch you if you stay in stock only and traditional portfolios,” he said. “You’ll just lose the assets during the wealth transfer.”
Tax-aware capabilities around private real estate were flagged as particularly consequential. McGowan and other panelists noted that roughly $20 trillion of the wealth transfer sits in real estate, and advisers who cannot execute or counsel on structures such as 1031 exchanges or 721 transactions risk losing significant client assets. “If you’re not focusing on private markets, but also things like 1031 and 721 transactions, you’re going to lose anywhere from 20% to 50% that your RIA runs through the generational wealth transfer,” he warned. “If you do adopt private markets, you’re going to be the receiving end of that, and that’s going to make your business perform better. It’s also going to probably give you a higher multiple and be more valuable.”
Practitioners at the conference underlined client outcomes and fiduciary design as the primary drivers of private allocations, even where valuation uplift is a likely by-product. Will Sterling, partner and CIO at TritonPoint Wealth, said the firm’s adoption of private markets was motivated by serving clients, enhancing experience and growing by referral rather than a short-term focus on multiples. “The utilization of private markets is driven by serving more clients and helping more clients,” he said.
Firms are taking different approaches to deliver private exposure. Some adopt bespoke, multi-manager solutions to preserve fiduciary portfolio construction; others, including platform providers, have introduced interval funds or pooled vehicles that blend private equity, real estate and infrastructure to broaden access for mass-affluent and high-net-worth clients. Phill Rogerson, SVP and head of the RIA channel at AssetMark, described an interval-fund approach that allocates to managers such as Apollo, KKR and StepStone as a way to scale access for adviser networks.
Tax efficiency and operational infrastructure are pivotal. Noreen Brown, co-CIO at Summit Financial, cautioned that tax benefits vary across private asset types , with private credit often the least tax-efficient and real estate offering more tax planning levers , and stressed rigorous manager due diligence. “There are so many opportunities in the private space to give advice to larger clients and the positive and negatives across the different kinds of tax reporting,” she said. Bob Hostetter of VestGen Wealth Partners added that K-1 consolidation and partnership tax administration require investment in platforms or third-party services to keep adviser operations scalable.
Market-level data and deal activity corroborate the view that private markets and institutional capital are reshaping RIA valuations. An M&A report cited by industry advisers showed median RIA valuations rose to about 11 times EBITDA in 2024 from roughly 9.9 times in 2023, driven by institutional interest and a preference for firms with recurring revenue. Analysis from valuation advisers and industry commentators points to private equity’s growing role in dealmaking , a shift that has increased competition for scale-oriented, tech-enabled RIAs and pushed multiples higher for buyers in 2024–25.
The move into private markets is accelerating within advisory firms themselves. Industry surveys and studies indicate broadening allocations to private credit, private equity and infrastructure, with many RIAs either currently allocating or planning to increase exposure in 2025. Large wealth managers and alternative asset managers are signalling adviser-facing strategies to meet demand, while private-equity-backed consolidators continue to prioritise platforms that can demonstrate strong growth, repeatable revenue and investible private-market programmes.
Taken together, the commercial case is straightforward: capability to source, implement and service private market solutions can improve client retention and attract generational flows, while also enhancing an RIA’s strategic story to buyers. Industry data shows buyers are willing to pay premiums for scale, recurring revenue and differentiated service offerings , attributes that private-market capabilities increasingly help deliver.
But advisers and firms should weigh the trade-offs. Private investments often bring liquidity constraints, more complex tax reporting, and heightened due-diligence burdens. As several panelists noted, success depends on aligning product design with fiduciary duty, investing in operations and tax infrastructure, and ensuring managers and structures are independently vetted.
For RIAs contemplating the shift, the message from practitioners and market observers alike is that private markets can be a value-creating lever , provided firms build the governance, client‑service and operational scaffolding to support them. Industry reports and conference participants suggest that, over time, those capabilities are likely to translate into stronger growth, stickier client relationships and, in many cases, higher valuation multiples when exit opportunities arise.
- https://www.wealthmanagement.com/ria-edge/ria-alts-pro-private-market-investing-for-clients-may-boost-valuations – Please view link – unable to able to access data
- https://www.wealthmanagement.com/ria-edge/ria-alts-pro-private-market-investing-for-clients-may-boost-valuations – This article discusses how registered investment advisors (RIAs) incorporating private market investments can enhance client attraction, retention, and firm valuation. Patrick McGowan of Sanctuary Wealth highlights that integrating private markets may increase a firm’s valuation multiple from 2.5x to 3x over a decade. The piece also emphasizes the importance of advisors understanding real estate tax strategies, such as 1031 and 721 exchanges, to capitalize on the $100 trillion wealth transfer between generations.
- https://www.fa-mag.com/news/m-a-report-sees-rising-valuations-for-rias-81949.html – This report from Advisor Growth Strategies reveals that valuations for RIA firms have increased, with the median valuation at 11 times EBITDA in 2024, up from 9.9% in 2023. The surge in mergers and acquisitions, driven by institutional investments, has led to higher valuations, especially for larger firms. The report also notes that firms with strong recurring revenue streams are more attractive to buyers, leading to premium bids.
- https://mercercapital.com/private-equitys-growing-influence-on-ria-dealmaking-and-valuation-multiples/ – Mercer Capital’s analysis highlights the growing role of private equity in RIA industry consolidation. In the first half of 2025, private equity firms accounted for 53% of acquirers, up from 45% the previous year. This trend reflects a strategic shift towards scale-driven models, with private equity-backed firms focusing on high-net-worth client bases and modernized operations to achieve premium valuations.
- https://www.prnewswire.com/news-releases/alternative-fund-advisors-releases-ria-private-credit-usage-study-confirming-continued-growth-in-the-asset-class-302416231.html – Alternative Fund Advisors’ study reveals that 80% of RIAs either currently allocate to private credit or plan to do so in 2025. Additionally, 45% of firms allocate more than 5% of a typical client portfolio to private credit, indicating its growing importance in client portfolios. The study underscores the increasing mainstream acceptance of private credit among RIAs.
- https://www.advisorpedia.com/fintech/why-ria-valuations-are-climbing-and-how-tech-driven-firms-are-winning-the-ma-race/ – Advisorpedia discusses the surge in RIA valuations, driven by private equity-backed firms leading nearly 70% of 2025 deals. The article notes that institutional buyers are establishing a long-term presence in the market, with expectations of continued momentum into 2026. It also highlights the emergence of new deal criteria, including investment themes and strategic fit, influencing the M&A landscape.
- https://www.kkr.com/insights/unlocking-future-of-portfolio-management-for-rias – KKR’s insights reveal that nearly 90% of their Global Wealth Investment Council members expect to increase private market investments in collaboration with financial advisors. The survey indicates that 45% of RIAs plan to increase allocations to private equity, and 32% to private infrastructure, emphasizing these areas as key growth opportunities for RIAs.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative is current, published on December 4, 2025, and pertains to the RIA Edge Private Markets conference held on the same date. No evidence of recycled or outdated content was found. The report is based on a recent press release from Sanctuary Wealth, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were identified. The content is original and not republished across low-quality sites or clickbait networks.
Quotes check
Score:
10
Notes:
The direct quotes from Patrick McGowan, Managing Director and Head of Alternative Investments at Sanctuary Wealth, are unique to this report. No identical quotes were found in earlier material, indicating originality. Variations in wording were noted, but these are consistent with the context and do not suggest reuse.
Source reliability
Score:
10
Notes:
The narrative originates from WealthManagement.com, a reputable platform within the Informa Connect Division of Informa PLC. Sanctuary Wealth, the company mentioned, is a legitimate entity with a verifiable public presence. Patrick McGowan’s professional background is well-documented, further supporting the reliability of the information.
Plausability check
Score:
10
Notes:
The claims regarding the impact of private market investments on RIA valuations are plausible and align with industry trends. The narrative is consistent with recent developments in the wealth management sector, including Sanctuary Wealth’s initiatives in alternative investments. The language and tone are appropriate for the topic and region, with no inconsistencies or suspicious elements identified.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is current, original, and sourced from a reputable platform. The information is plausible and consistent with industry trends, with no signs of disinformation or credibility issues.