In a bid to snare wealthy clients, two money center banks have forged alliances with a Chicago-based financial advisory firm that caters to the ultra-rich.
Bankers Trust New York Corp. will offer asset management to clients of the firm, Graystone Partners. And, in a separate arrangement, Chase Manhattan Corp. will offer the clients global and domestic custody services, said Graystone's chairman, David Horn.
Such alliances between banks and niche players could become increasingly common as banks seek new distribution channels for their products, bankers and observers said.
Pedal to the Metal
"You will see more companies coming together like this to accelerate their businesses," said John L. Murphy, a managing director in Bankers Trust's Private Advisory Services division.
The alliances are a coup for Graystone, which was started just over a year ago by veterans of some of the private banking world's top companies - including Northern Trust Co., Bessemer Trust Co., and Bankers Trust.
The firm serves families with net worths of $50 million or more.
Under a deal announced earlier this week, Bankers Trust's Private Advisory Services group will offer the clients a range of investment products, including market-linked deposits and interest-rate swaps.
'A Great Strategy'
"Our capital markets products will allow them to diversify their portfolios, increase their liquidity, and reduce their investment-concentration risk," said Richard Marin, managing director of Private Advisory Services.
Since Bankers Trust has already invested money in leading-edge products, tapping into a company that can distribute them is "a great strategy," said Paul J. Groncki, vice president at PSI, a Tampa-based firm that tracks the private banking market.
"It's a very effective way for institutions like Bankers Trust, which are large and sophisticated, to open up distribution channels" for their products, he added.
Chase is to focus on providing custody services, which entails managing the documentation of securities transactions.
Mr. Horn would not discuss that venture in detail, and officials from Chase were not available for comment.