Behind the deal: Louisville area wealth planning firm receives growth capital to expand reach

Axiom Financial Strategies Group, a New Albany, Indiana-based provider of financial planning and wealth management services, received a minority stake investment to help grow the business.

Vaughan Scott, CEO of Axiom Financial Strategies Group, said the growth capital from Merchant Investment Management, a New York City-based private equity firm, will help the new business expand more efficiently  and effectively  now that the company can leverage resources from the larger firm.

Scott said Axiom Financial Strategies Group was originally conceived in the fall of 2019  with an official  launch date on Feb. 24, 2020. He said the company probably had two or three normal weeks before the coronavirus outbreak hit.

“The Merchant model is one (that) they want to partner with great businesses and allow them to grow more efficiently and effectively than they  might  have been able to on their own,” Scott said in an interview. “One of my personal missions is to create great opportunities right here in the Greater Louisville area. I’m really excited about the fact that while we’re still a locally owned firm, we have incredible strengths in terms of our ability and capacity to expand.”

Scott declined to disclose how much the minority stake investment from Merchant  was, but did say that he and his business partner still own the overwhelming majority of Axiom Financial Strategies Group.

Tim Bello, managing partner at Merchant Investment Management, said he partnered his firm with Axiom Financial Services Group because the two companies aligned well in four key areas for him: good people, fairness in providing capital investments, ability  to grow together and the potential to  innovate in the  financial services industry beyond the bounds of the norm to affect change.

He said the partnership between the two companies centers around sharing risk, upside and genuine care for the  outcomes of the businesses they work with. Bello explained the mechanics of the partnership would operate more so in a reactive than proactive way, in that Vaughan and his leadership team will still control Axiom Financial Services Group, but can engage with Merchant Investment Management on different  needs and topics to help come up with solutions for clients.

“We don’t transact. We align, we build and we collaborate,” Bello said in an interview. “For Vaughan (Scott) and Mike (Grau) and the team there, it was their ability to see down the road and say it’s a business of growth but also of understanding our clients – their simple needs, their complex needs, their entrepreneurial needs – and how we can advise them beyond the lines of the stock market is so often overlooked.”

Bello said certain parts of the country are a real pleasure to do business in, the Midwest being one of them. And as it relates to opportunities, he said he’s seeing more people running toward those deals than not.

Merchant Investment Management currently has 31 partnerships with firms across the country, with 26 of those partners being similar to Axiom Financial Strategies Group, but  unique in their own rights. He said it’s not easy to find companies that tick all the boxes and have the geographic positioning that Axiom Financial Strategies Group does.

Scott said in terms of local opportunities, the Greater  Louisville area’s best days are ahead of us, but we have to think differently about the opportunities in the community and how to keep thriving businesses here.

For example, he said he’s been working with a lot of family-owned businesses and he said he’s tired of seeing them go down the same path where they feel their only option is to sell the business when there’s no family heir who wants to take over.

He said there’s no question deal flow is accelerating this year and the reason why some of these businesses are so attractive to private equity firms is because they have real value that the family could continue to see if they continue to own their businesses, given the family is able to keep maintaining the business.

“It may seem like heresy to some in our industry, but I believe many times – assuming the  business  is very successful  and very profitable – the family is often better served financially to continue to own the business, even if it’s no longer family operated,” Scott said. “I think it’s really important that people do see the opportunities we have in the Greater Louisville region.”

Sarah Shadburne

Reporter – Louisville Business First

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