GlobalBridge Inc., a Minneapolis open architecture managed account provider, says it plans to launch a platform to help trust banks gather institutional assets.
GlobalBridge said it would announce a partnership today with Mercer Investment Consulting Inc., a global provider of investment consulting services to fiduciaries of pension funds, foundations, and endowments, to give its customers investment research and consulting. The companies will offer the GlobalEdge platform to help banks compete for share in the institutional market.
Kelly Coughlin, GlobalBridge’s chairman and chief executive officer, said banks’ share of institutional assets has been cut in half in the past 10 years by wire houses, brokers, and other financial advisers. GlobalEdge is designed to help banks leverage their local presence, wealth management expertise, and pricing advantage to attract institutional clients, he said.
“For trust banks to erase some of the erosion that has occurred in terms of their market share, they need to consider different tools and different expertise,” he said.
The Mercer partnership will give GlobalBridge the ability to help midsize trust banks attract institutional clients with more than $300 million of assets, Mr. Coughlin said, and he expects his company to use the platform to nearly double its base of customers — from 45 banks to 85 by the end of next year.
He said he expects the company, which was started in 2000, to reach $1 billion of assets under custody this quarter. GlobalBridge has $850 million of assets and expects to reach $1.3 billion by yearend. “Our plan is to double our assets every year for the next four years,” he said. “GlobalEdge will help us to do that.”
Analysts said this expectation is lofty given market conditions and an overwhelming trend away from banks. Mary McMahon, a principal and the director of relationship management at GlobalBridge, said banks are not losing institutional accounts — they just are not developing new ones because they do not offer open architecture with managed account services.
Prudential and Sungard are competing with GlobalBridge to offer open architecture managed accounts through banks, analysts said. Mercer Investment Consulting, GlobalBridge’s new partner, is a unit of Mercer Human Resource Consulting, an operating company of Marsh & McLennan Cos. Inc.
Mr. Coughlin said GlobalBridge would continue to look for growth by working with banks that want to expand their service offerings. Though GlobalBridge’s bank customers are heavily concentrated in the seven or eight states of the Upper Midwest, Ms. McMahon said the company will continue to look in areas with concentrations of trust banks.
“You’d think that California and Seattle would have a lot of trust banks, but we find more clients in Iowa than we do in California,” she said.
Mr. Coughlin said GlobalBridge does not plan to look in any specific region for new customers. “We don’t have geographic qualifications,” he said; “we have cultural qualifications.”
“We are finding excellent acceptance in second-tier cities outside of the primary markets,” he added. “We are finding these firms a lot more receptive and open-minded. We are more than happy to let our competition fight for the top 25 cities and the top 25 banks.”
