Boston Private Financial Holdings, a private banking company with a balance sheet of less than $1 billion, says it is eager to stay in the race to manage the assets of the wealthiest investors.
On Monday the parent of Boston Private Bank and Trust Co. announced a $10.5 million deal for Taylor Investments Inc., a Concord, N.H., investment advisory company that manages $535 million of assets. The deal is expected to close within 60 days.
The announced acquisition would be Boston Privates second in less than a year. In August it bought Sand Hill Advisors, a Menlo Park, Calif., growth-style investment adviser. Sand Hill brought about $3.7 billion of assets under management to Boston Private and gave it a foothold in Northern California, where it hopes to gain access to Silicon Valley wealth.
Timothy L. Vaill, chairman and chief executive officer of Boston Private, said the Taylor deal is small but strategic.
The acquisition would give Boston Private an established presence in value-style investing and would put it at the helm of a wealth management business with $6 billion of separate account assets, Mr. Vaill said.
He said he wants to approach the high-net-worth market with a two-pronged strategy of offering private banking services like estate planning and jumbo mortgages in tandem with wealth management. The company generally caters to individuals with $2 million or more to invest, he said.
In October, Boston Private hired James C. Wall, the former CEO of Bank of Los Altos in California, to help set up a private banking enterprise focusing on the Silicon Valley area. That operation is expected to be up and running by midyear.
The company is looking to expand beyond New England and California, Mr. Vaill said. Weve identified a handful of regions in the country where new wealth has grown over the last few years, including the Northwest, the District of Columbia, Texas, and Denver, he said.
Competition to gather the assets of high-net-worth people has heated up in recent years with the growth of new wealth, Mr. Vaill said.
Goldman Sachs is all over this market, and now you have U.S. Trust and Schwab, he said referring to Charles Schwab & Co.s acquisition of the private banking company U.S. Trust Corp. in June.
Still, Mr. Vaill said he believes there is room for a niche player like his company. We think youre better off operating from a smaller platform.
Gerard S. Cassidy, an equity analyst at Tucker Anthony Inc., said Boston Private is a very successful niche player whose size makes its service more focused.
The contact the customers have with Tim Vaill can be very involved with a $2 million trust, whereas Marshall Schwartz, CEO of U.S. Trust, would not be as involved in an account that small, Mr. Cassidy said.
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