Though Wilmington Trust Corp. is still looking for acquisitions, the new head of its investment management group hopes the restructuring it announced this week will help it grow organically.
Robert M. Balentine said he expects the group, which was managing $32.9 billion at midyear, to add several billion dollars a year.
It plans to do so by building its investment consulting business; adding to its family office, foundation, and endowments group; and developing external distribution with institutional customers.
“Acquisitions will not be the model for growth for the investment management group,” Mr. Balentine said. “Wilmington Trust will continue to look for acquisitions in markets that make sense, but the investment management group will stress organic growth opportunities.”
His promotion was announced Wednesday. Mr. Balentine had been running the Delaware company’s Atlanta office and leading its investment strategy team.
In the old setup, investment management executives reported to multiple supervisors, Mr. Balentine said. Now they all report to him.
The investment management group has beat its sales goals in recent years, adding $20 million to $25 million in revenue from new business annually since 2002. “New business is really what is going to allow this company to continue to grow,” he said.
But for several years the crux of the parent company’s growth strategy has been new offices and acquisitions.
In the past three years it has opened investment offices in California, Delaware, Florida, New York, New Jersey, and Pennsylvania. And in a July 2003 interview, Ted Cecala, Wilmington’s chairman and CEO, said the company intended to establish operations in the Midwest and Pacific Northwest through acquisitions.
It has grown aggressively through acquisitions since January 1998, when it bought a stake in Cramer Rosenthal McGlynn, a White Plains, N.Y., value manager with $3.2 billion of assets under management.
In July 1998 it acquired a stake in Roxbury Capital Management, a Los Angeles growth manager, which also managed $3.2 billion.
Mr. Balentine came to Wilmington in the January 2002 acquisition of his Atlanta investment consulting firm, Balentine & Co. He had started it with his late father in 1987 after a career spent mostly at Merrill Lynch & Co.
Wilmington kept Mr. Balentine on to develop more business from families with more than $25 million of investible assets. In August 2003 it created the investment strategy team, with a dozen executives, and put him in charge.
Analysts said the acquisitions have not generated the type of growth that Wilmington had hoped for. Assets under management have grown 16.7% since the end of 2002 and 1.9% this year.
“Every deal doesn’t make money, but when a series of deals fail to generate assets, it is time for a new strategy,” said Kevin Daniels, an analyst at Daniels & Associates of Boston.
Mr. Balentine said the strategy team is crucial to his group’s goal of organic growth. The idea was to bring together Wilmington’s best experts to develop a single investment process for customers.
“Twenty years ago I really struggled with the fact that the client experience with most banks and brokerage firms really relied on which individual adviser they worked with,” Mr. Balentine said. “The investment management team allows us to supply all of our customers with access to our firm’s best thinking.”
Wilmington wants the strategies it applies to a $2 million portfolio to be consistent with those it uses for a $50 million one, he said.
On Wednesday the company added three executives from KPMG LLC to the team: Neil Wolfson was hired as the chief investment officer, Rex Macey as the head of equity management, and Samuel Fraundorf as the director of manager research.
Mr. Wolfson was a national partner in charge of KPMG’s investment consulting group and KPMG Investment Advisors. Mr. Macey was the advisory unit’s director of research, and Mr. Fraundorf was a senior manager.
