Cetera Financial Group seeks to review strategic alternatives for its capital structure and find solutions for certain capital allocation issues, Financial Advisor reported, citing "investment banking sources."
"Sources in the private equity world" said Cetera originally planned to exchange costly debt for less expensive capital. However, some major investors wanted Cetera to look into other options, including a sale of the group and repricing of their stakes. Cetera has more than 20 shareholders and most of them own less than 7% stake in the group, which could likely mean that they have different investment objectives, according to the report.
The group is expected to announce its chosen adviser in the week of Feb. 26, with Goldman Sachs & Co. mentioned as the front runner for the role. Cetera confirmed the capital structure review, which was described by a spokesperson to Financial Advisor as part of the normal course of business.
Cetera Financial Group houses around 8,000 brokers and advisers. Its network of retail independent broker/dealers includes Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Financial Institutions, Cetera Financial Specialists LLC, First Allied Securities Inc. and Summit Financial Services Group.