Donaldson, Lufkin & Jenrette's new brokerage office in London could prove to be a boon to the firm's trust company.
DLJ's Winthrop Trust Co., a limited-purpose, state-chartered operation, is establishing an offshore trust company on the island of Jersey in the English Channel to help lure wealthy European prospects.
Many new accounts from London could be put in trust on Jersey by European clients, so the trust company could benefit from additional fee income.
The Jersey operation will signal a diversification in strategy for New York-based Winthrop, which had once looked only to the domestic trust business. Now it is likely to open more funded accounts for investors, according to Guy S. Waltman, chairman of Winthrop Trust.
Winthrop's affiliated DLJ investment services group manages smaller accounts and has 350 brokers and offices in several affluent markets in the United States, including San Francisco and Miami.
In Europe, the firm expects to take on British, French, German, Belgian, and Dutch clients. "For a variety of reasons they are going to be interested in having assets offshore," Mr. Waltman said. "They worry about political instability, ..., flight capital-things that don't concern Americans."
Bermuda-based Jardine Matheson Holdings Ltd. will be agent for Winthrop Trust Co. (Jersey) Ltd. The trust company is part of Wood, Struthers & Winthrop, an upscale DLJ division, which has $9 billion of assets under management.
DLJ's investment services group opened its London office in March and has 12 brokers.
The executive in charge, Thomas Dicker, joined the firm six months ago from Morgan Stanley & Co.'s private-client group in London, where he was a managing director. At DLJ, he hopes to have 30 brokers by yearend.
Besides staff, Mr. Dicker said, a full breadth of services, including its own trust facility, is a must when marketing to Continental wealth.
"It is something that is necessary as a service to high-net-worth individuals," he said. "You want to make sure the client is faithful to you. If his trust is with you, you will keep that client a lot longer."
In New York, Mr. Waltman, who helped set up Bessemer Trust Co. (Cayman) Ltd. several years ago, said Winthrop's move offshore follows its brokerage affiliate's push into Europe.
The brokerage group will get commissions for trades made in the offshore accounts, and Winthrop will get trustee fees for administering the Jersey unit.
"The nice thing about it is, it's not a terribly time-consuming and expensive process to go through," Mr. Waltman said. "It's not like trying to get a charter for a trust company in New York."