Jefferson National Successfully Completes Management Buyout Transaction

January 17, 2012

Financial Partners Fund, The Stephens Group and Eric Schwartz Team with Jefferson National Executives to Acquire Company and Drive Fee-Based Advisor Distribution Strategy.

Substantial New Capital Accelerates Growth of Leading Provider to RIA and Fee-Based Advisors.

Jefferson National Financial, a leading innovator of products and services for Registered Investment Advisors (RIAs) and fee-based advisors, announced today that it has successfully completed a management buyout led by Financial Partners Fund (“FPF”), a unit of Citi Capital Advisors, The Stephens Group and Eric Schwartz, a private investor.

“The executive team behind the management buyout was led by Mitchell H. Caplan, the Company’s Chief Executive Officer. “We couldn’t be more pleased with the exceptional roster of investors who have put their resources behind us and are extremely fortunate that Eric Schwartz will serve in the roll of non-executive Chairman of the Company,” said Caplan. “Jefferson National will deploy the new capital from this transaction to move forward aggressively and drive greater growth of our successful RIA and fee-based advisor distribution strategy. 2011 was a record year for Jefferson National across all sales measure and we look forward to a new record-breaking year in 2012.”

As part of the $83 million transaction, the company will deploy substantial new capital to accelerate growth and target several important secular trends: the market’s fastest growing demographic of High Net Worth investors, the financial service industry’s fastest growing distribution channel of RIAs and fee-based advisors, and the increasing demand by these advisors and investors for new superior value products and services. As more advisors continue breaking away from commission-based revenue, Cerulli projects that 44% of all advisors will be within independent channels by 2015.1

Caplan continued, “Starting in 2005, Jefferson National completely re-engineered the way variable annuities are bought and sold with a singular focus on serving fee-based advisors. Transforming the product with a proprietary technology platform, and rebuilding the distribution from the traditional wholesaler-driven model to a unique direct-marketing model, we have been able to dramatically reduce costs, create greater consumer value and become the leading variable annuity provider to the fee-based channel.”

Caplan, former CEO of E*Trade Financial, joined Jefferson National in 2010, reuniting with a leadership team that shares a history of working together to build innovative financial service companies, such as Telebank, the nation’s first direct bank, and E*Trade, a leading financial services firm. The team includes Laurence Greenberg, President of Jefferson National and former COO of Telebank, and David Lau, Chief Operating Officer of Jefferson National, former Chief Marketing Officer of E*Trade Bank, and former SVP Marketing at Telebank. Under their leadership, Telebank’s deposits grew from $200 million in 1994 to more than $8 billion in 2000. During Caplan’s tenure as CEO of E*Trade, revenue increased at record levels, from less than $1 billion in 2003 to approximately $3 billion in 2006.

“Key executives at Jefferson National are part of the same team that built Telebank into the nation’s largest direct bank, and then continued expanding the business after its 2000 sale to E*Trade in a $1.8 billion transaction,” said Steven Piaker, Managing Director, Financial Partners Fund. “As an early investor in Telebank, I saw firsthand their successful approach of using technology and unique marketing strategies to create consumer value.”

“We are extremely pleased and excited to be part of this transaction and to back the management team at Jefferson National with the resources of The Stephens Group,” said Robert Covington, Managing Director at The Stephens Group. “The transaction continues our firm’s strategy of investing in financial services companies with a fast growing and unique position in an expanding market. With its focus on RIAs, fee-based advisors and High Net Worth investors, Jefferson National is capitalizing on some of the industry’s most influential trends.”

With a national network of more than 1,500 RIAs and fee-based advisors, Jefferson National is a leading distributor to the fee-based channel. In 2005, Jefferson National launched Monument Advisor, the first flat-insurance fee variable annuity2 with the industry’s largest selection of more than 350 funds3. An unprecedented low-cost tax-deferred investing vehicle designed expressly for RIAs and fee-based advisors, Jefferson National’s flat-insurance fee VA has surpassed $1 billion in sales since its launch. Emerging from a crowded field of nearly 1,000 variable annuity products sold by more than 100 different companies, Monument Advisor is widely recognized as the lowest-cost retirement vehicle on the market5 and a leading variable annuity offered by RIAs.


Jefferson National is a leading innovator offering products and services for RIAs and fee-based advisors and the clients they serve, utilizing a flexible technology platform, highly efficient operations, and cost-effective servicing capabilities. Jefferson National is winner of more than 30 industry awards including the DMA 2010 Financial Services Company of the Year.4 The Company is based in Louisville, KY and domiciled in Dallas, Texas with authority in 49 states and the District of Columbia. To reach our advisor support desk, please call 1-866-WHY-FLAT (1-866-949-3528).


Financial Partners Fund (“FPF”), a unit of Citi Capital Advisors (“CCA”), is a proprietary investment fund that seeks to provide primary, secondary and special situations capital to financial services business. Led by Manu Rana and Steve Piaker, the FPF team has been investing for more than 15 years in public and private securities of financial services businesses and seeks to be an engaged, constructive and flexible financial partner to the management and other security holders of the companies in which they invest. FPF targets investments in the $10M to $40M range and may make larger investments alongside affiliated CCA strategies or CCA investors. To learn more, please visit:


The Stephens Group is a private, family-owned firm that invests its capital in private and public companies with exceptional management teams resulting in high returns on invested capital in growing industries. We invest in businesses across a broad range of industries, providing growth equity, recapitalization and leveraged buy-out financing to both private and public companies


Eric Schwartz is a private investor who is a former partner and Management Committee member of Goldman, Sachs until 2007. Among other responsibilities, while there Schwartz served as Co-CEO of Goldman Sachs Asset Management.


An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. The contract prospectus and underlying fund prospectuses contain this information. For a prospectus containing this and additional information, please contact your financial professional. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.

Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.

Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawal of tax-deferred accumulations are subject to ordinary income tax.

Withdrawals made prior to age 59 ½ may incur a 10% IRS tax penalty. Jefferson National does not offer tax advice. Annuities are not deposits or obligations of, or guaranteed by any bank, nor are they FDIC insured.

Monument Advisor is issued by Jefferson National Life Insurance Company (Dallas, TX) and distributed by Jefferson National Securities Corporation, FINRA member. Policy series JNL-2300-1, JNL-2300-2.

1Cerulli Quantitative Update: Intermediary Distribution, Cerulli Associate, 2011.

2Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional fees ranging from $19.99-$49.99 will be assessed for investors wishing to purchase shares of ultra low-cost funds. See the prospectus for details.

3Morningstar data as 12/31/11.

4Jefferson National was reviewed by the Direct Marketing Association, including a panel of independent judges and industry peers, and won for re-engineering the traditional commission-based distribution model and replacing it with an unprecedented web-based direct marketing approach.

5For an $80,000 contract, the $20 insurance fee is lower than all variable annuity insurance charges. Morningstar data as of 12/31/11.


Deborah Newman
Director Corporate Communications
Jefferson National

Michael Pascale
Managing Director
Abernathy MacGregor