H.I.G. Capital Builds Private Wealth Firepower with Three Hires

H.I.G. Capital just made its intentions clear: the fight for private wealth capital is real, and the firm's loading up for it. The Miami-based private equity firm announced three senior appointments to its capital formation team — all veterans of major wirehouse wealth platforms — signaling an aggressive push into the registered investment advisor and family office channels that have become critical fundraising arteries for alternative asset managers.

Patrick Toole and Mike Schoenlank from Merrill Lynch, and Jennifer Reid from Morgan Stanley — bring decades of combined experience navigating the complex, relationship-driven world of high-net-worth distribution. They're joining at a moment when private equity firms are fundamentally rethinking where their next dollar comes from. Institutional allocators remain crucial, but they're also saturated, slow-moving, and increasingly demanding on fees. Wealthy families and their advisors? That's where the growth is.

H.I.G. didn't just add headcount. It added the kind of talent that understands how to translate complex alternative investment strategies into language that resonates with advisors managing $500 million books for ultra-high-net-worth clients. That's not a trivial skill. Most private equity professionals can pitch an institutional LP cold. Far fewer can walk into a Raymond James branch office and explain why a lower mid-market buyout fund belongs in a trust account.

The firm manages over $60 billion in capital across a global platform spanning private equity, credit, and real assets. Its capital formation team now numbers more than 30 professionals worldwide — a scale that puts H.I.G. ahead of many of its peers in the wealth distribution race. But scale without the right relationships is just overhead. What matters is whether these hires can open doors that weren't opening before.

Ten years ago, private equity fundraising meant flying to Sacramento to pitch CalPERS. Today, it means sitting in a conference room in Naples, Florida, with three family offices and their Certified Financial Planner explaining why your IRR assumption isn't too aggressive. The shift happened fast, and it's structural. Institutional investors — pensions, endowments, sovereign wealth funds — collectively allocate trillions to alternatives, but their growth rates are flattening. Many are already at or near their policy limits for private equity exposure. Meanwhile, they're getting pickier, consolidating relationships, and pressing hard on fees.

Cerulli Associates, high-net-worth individuals held just 5% of their portfolios in alternatives as of 2023 — compared to 25-30% for institutional investors. That gap represents roughly $2 trillion in potential dry powder. Private equity firms see it. So do the wirehouses, independent broker-dealers, and RIA aggregators who are racing to build out alternative investment platforms to capture it.

The SEC's regulatory changes in 2020, which loosened restrictions on general solicitation and marketing to accredited investors, opened the floodgates. Firms like Blackstone, KKR, and Apollo moved quickly, launching semi-liquid interval funds and private wealth-focused vehicles that could be sold through wirehouse platforms. H.I.G. is playing catch-up in some ways — it's not a household name like those mega-cap shops — but it's also got advantages. It's nimble, relationship-driven, and willing to do the blocking and tackling required to win over skeptical advisors one meeting at a time.

That's where hires like Toole, Schoenlank, and Reid matter. They know the gatekeepers. They know which advisors are actually allocating capital versus just taking meetings. And they know how to position a firm that isn't splashed across CNBC every week but has a 30-year track record and $60 billion under management.

Patrick Toole joins as a Managing Director focused on the Northeast and Florida markets — two of the wealthiest and most institutionally sophisticated private wealth corridors in the U.S. He spent over a decade at Merrill Lynch's alternative investments group, where he worked directly with financial advisors to structure and place private equity, hedge fund, and real asset allocations into client portfolios. Before Merrill, he was at Bank of America's private bank, giving him a dual lens on both the wirehouse advisor channel and the direct family office/UHNW client side.

Mike Schoenlank, also a Merrill alum, brings a similar pedigree but with deeper roots in the Midwest and Mid-Atlantic. He spent 15 years in roles spanning alternative investment sales, wealth advisory, and product strategy. His expertise is in translating private market opportunities into portfolio construction language that resonates with advisors who think in terms of 60/40 allocations, tax efficiency, and estate planning. That's critical. H.I.G. doesn't just need someone who can sell a fund. It needs someone who can explain why that fund fits into a holistic wealth plan for a $50 million client.

Jennifer Reid, arriving from Morgan Stanley, adds geographic and institutional depth on the West Coast and in international markets. She spent over a decade covering ultra-high-net-worth clients and family offices, with a particular focus on direct co-investment opportunities and customized separate account structures. That background is valuable for a firm like H.I.G., which runs multiple strategies across private equity, credit, and infrastructure. Families don't just want a commingled fund. They want optionality, fee negotiation, and sometimes a direct seat at the table on individual deals.

Together, the three cover the major wealth corridors in the U.S. and extend H.I.G.'s reach into advisor networks that have historically been dominated by the mega-cap alternatives giants. They're not competing on brand recognition. They're competing on service, access, and the ability to deliver differentiated returns in strategies — like lower mid-market buyouts and distressed credit — that aren't as crowded as the large-cap space.

Selling private equity to financial advisors is nothing like selling to institutional LPs. Institutions have internal investment committees, dedicated alternatives teams, and multi-year capital deployment plans. Advisors have 150 client relationships, compliance officers breathing down their necks, and maybe 90 minutes a quarter to think about alternatives. The sales cycle is different. The friction is different. The trust threshold is higher.

H.I.G. isn't starting from zero. The firm's been around since 1993 and has built a reputation as a disciplined, operationally focused investor across private equity, credit, and real assets. Its flagship private equity funds target the lower and middle market, typically acquiring companies valued between $50 million and $500 million. That's a sweet spot: big enough to generate institutional-quality returns, small enough to avoid the over-competition and valuation pressure plaguing mega-cap deals.

The firm's portfolio includes more than 300 companies globally, spanning healthcare, business services, industrials, technology, and consumer sectors. It's also one of the few firms that runs both a private equity and a credit platform at scale, giving it flexibility to offer wealth clients access to multiple return streams — equity upside through buyouts, yield through direct lending, and downside protection through distressed and special situations credit.

But here's the challenge: H.I.G. competes in a world where Blackstone's pulling in $30 billion for its latest private wealth vehicle and Apollo's booking $50 million minimums from family offices like it's routine. The mega-cap firms have brand, distribution scale, and billion-dollar marketing budgets. H.I.G. has performance, access, and a willingness to get granular with clients on deal-level diligence and co-investment opportunities. The question is whether that's enough to break through the noise.

The three new hires suggest H.I.G. believes the answer is yes — but only if it invests in the people and infrastructure to compete at the relationship level. Private wealth isn't a product sale. It's a trust sale. Advisors need to believe you'll answer the phone when a client calls with a liquidity issue. Families need to believe you'll give them the same level of service you'd give a $500 million pension fund. That requires bodies, coverage, and credibility. H.I.G. just added all three.

It's worth noting that H.I.G. is based in Miami — a city that's become the de facto capital of private wealth in the U.S. over the last five years. Families, family offices, and financial advisors have migrated south in waves, drawn by tax policy, lifestyle, and a growing ecosystem of alternative asset managers, law firms, and service providers. The city's gone from a real estate and Latin America finance hub to a legitimate competitor to New York and San Francisco for wealth management talent and capital.

For H.I.G., that's a structural advantage. The firm's headquartered in the city where many of its target clients now live, work, and allocate capital. It's easier to build relationships when you're in the same time zone, attending the same charity events, and bumping into prospects at the same steakhouses. Geography isn't everything, but in private wealth, it's not nothing either.

H.I.G.'s announcement is part of a much larger pattern. Nearly every private equity firm with assets over $10 billion is either building out a private wealth team or expanding the one it already has. Some are doing it organically through hires like H.I.G. Others are acquiring distribution platforms outright. Still others are partnering with wealth management firms, launching semi-liquid funds, or structuring bespoke vehicles designed to fit into trust and estate planning structures.

The urgency is driven by two forces: opportunity and necessity. The opportunity is the $2 trillion allocation gap mentioned earlier. The necessity is that institutional fundraising has become a grind. Limited partners are overwhelmed with options, consolidating managers, and slow-rolling commitments. Fundraising cycles that used to take 12 months now take 18 or 24. Private wealth, by contrast, can move faster — assuming you've got the relationships and the product.

Not everyone will succeed. Wealth distribution is hard. It requires patience, brand-building, and a willingness to educate rather than just sell. Firms that show up with a pitch deck and expect advisors to bite are going to waste time and money. Firms that show up with people like Toole, Schoenlank, and Reid — who've spent their careers in the trenches of wealth management — have a real shot.

There's also a product evolution happening in parallel. The traditional 10-year closed-end private equity fund doesn't work for most wealth clients. They want liquidity, transparency, and tax efficiency. So firms are launching interval funds, evergreen structures, and separately managed accounts. H.I.G. hasn't announced a dedicated wealth-focused vehicle yet, but it's a safe bet that's coming. You don't hire three senior private wealth professionals unless you plan to give them something differentiated to sell.

H.I.G. is far from alone. Over the last 18 months, firms including Vista Equity Partners, Silver Lake, and Clearlake Capital have all made similar moves — adding senior wealth distribution talent, often from the same wirehouse platforms. The talent pool is finite. There are only so many people who've spent a decade at Merrill or Morgan Stanley working on alternatives and know how to navigate the internal approval processes, advisor incentive structures, and compliance hurdles that govern those platforms.

That scarcity is driving compensation up. Managing Directors with wirehouse pedigrees are commanding packages that rival or exceed what they'd earn staying in the wealth channel. The upside for them is equity participation, carried interest access, and the ability to build a team rather than just execute someone else's product strategy. For the firms, it's an expensive but necessary investment. You can't access $2 trillion in underallocated capital without paying for the keys.

The near-term goal is straightforward: increase the percentage of fund commitments coming from private wealth sources. Today, that's likely in the low single digits for H.I.G. — most of its capital still comes from institutions. Over the next five years, the firm will aim to shift that mix materially, potentially targeting 20-30% of new commitments from wealth channels. That would put it in line with where the mega-cap firms are today.

The longer-term strategy is more nuanced. Private wealth capital isn't just a fundraising channel — it's a different kind of LP base. Wealth clients are stickier. They're less likely to churn out of a manager over one bad vintage. They're also more likely to invest across multiple strategies if the relationship is strong. A family office that commits $25 million to a buyout fund might also allocate to credit, infrastructure, or co-investments if the service and access are there.

That's the real prize: building a multi-strategy relationship where H.I.G. becomes a go-to alternatives partner rather than a one-off allocation. The three new hires give the firm the coverage and credibility to pursue that. Whether they can execute on it depends on product development, performance, and the ability to deliver on the relationship-driven service model that wealth clients demand.

There's also a signaling element. By expanding the team this visibly, H.I.G. is telling institutional LPs, competitors, and portfolio companies that it's serious about growth and capitalization. Private equity firms live and die by their ability to raise capital. Demonstrating momentum in fundraising — even if it's incremental — matters for talent retention, deal flow, and competitive positioning.

Not everything here is upside. Private wealth distribution is expensive, slow, and unforgiving of missteps. If H.I.G. launches a product that underperforms or fails to deliver on liquidity promises, the reputational damage in the wealth channel spreads fast. Advisors talk. Family offices compare notes. One bad experience can close doors across an entire wirehouse platform.

There's also the risk of channel conflict. If H.I.G. starts competing aggressively for wealth capital, it could strain relationships with institutional consultants who don't love the idea of their GPs chasing retail dollars. Some pensions and endowments view private wealth vehicles as dilutive or distracting — a sign that a firm is prioritizing AUM growth over performance. That's not necessarily fair, but perception matters.

Then there's execution risk. Adding talent is one thing. Integrating them into a firm's culture, giving them the resources to succeed, and aligning internal incentives around wealth distribution is another. If the broader H.I.G. partnership doesn't fully buy into the private wealth strategy — if it's seen as a side project rather than a core pillar — the new hires will struggle to deliver.

Finally, there's the macro backdrop. Wealth clients are notoriously momentum-sensitive. If public markets rip higher and private equity returns lag, the allocation appetite evaporates. If interest rates stay elevated and cash yields remain attractive, families will park capital in treasuries rather than lock it up for seven years in a buyout fund. H.I.G.'s timing is good — alternatives are in favor, and wealth platforms are hungry for product — but macro can turn fast.

Hiring is the easy part. Winning the capital is harder. Over the next year and a half, watch for a few milestones that will signal whether H.I.G.'s private wealth push is working. First, does the firm launch a dedicated wealth-focused vehicle — an interval fund, evergreen structure, or SMA platform? Second, does it announce partnerships with major RIA aggregators or wirehouse platforms? Third, does it start showing up at wealth management conferences, family office forums, and advisor events with a real presence?

If the answer to all three is yes, then Toole, Schoenlank, and Reid are doing their jobs. If the hires fade into the background and private wealth remains a footnote in H.I.G.'s fundraising mix, then this was a head-fake — a bet the firm made but didn't fully commit to. The private equity industry is littered with firms that talked about wealth distribution but never really executed on it.

But here's the tell: H.I.G. hired three people, not one. That's not a pilot program. That's a platform build. The firm's betting that private wealth becomes a material part of its capital base over the next decade, and it's willing to spend the money and time to make it happen. In a fundraising environment where every marginal dollar matters, that's not a small decision.

For wealth advisors and family offices, the takeaway is simpler: H.I.G. wants your business, and it just hired the people who know how to ask for it. Whether that translates into better access, better service, or just better sales pitches remains to be seen. But the firm's serious. And in private equity, seriousness about capital formation usually translates into results — eventually.