Graystone Partners, a Chicago-based firm that advises ultra-wealthy families on managing their money, has been acquired by New England Investment Cos. for an undisclosed sum.

The deal pairs Graystone - which specializes in finding investment managers for clients with at least $100 million in assets - with the nation's fifth-largest publicly traded money management firm, with over $65 billion in assets under management.

The move, coming as both banks and their rivals are vying for entry to the affluent market, is sure to make waves in the banking industry. Though Graystone was founded only three years ago, its chairman, David B. Horn, has established the firm as a significant force in private banking.

Mr. Horn spent 16 years in the commercial banking sphere, including stints in private banking at Continental Bank Corp., Northern Trust Corp., and Bessemer Trust Cos. He is credited with starting Northern Trust's wealth management group.

His new colleague at New England Investment - chairman Peter S. Voss - is also a former private banker, most recently heading BankAmerica Corp.'s investment and private banking division.

In an interview Wednesday, Mr. Horn said he got to know Mr. Voss about four years ago. "It pays to stay on friendly terms," he said.

For New England Investment, with its own network of investment managers, the acquisition seems like an ideal fit. Mr. Voss could not be reached for comment, but in a prepared statement he said Graystone will help his company's subsidiaries and affiliates understand "the needs and interests of the private client."

The Graystone deal also brings into the forefront the issue of how the business of managing wealthy people's money is changing - from single to multiple investment managers.

According to industry insiders, most high-net-worth individuals and families employ multiple investment managers for the sake of reduced risk and diversified portfolios.

Banks have traditionally preferred to do in-house investment management, charging fees on managing the clients' entire assets. That practice is now changing, in part because of competition from nonbanks and from clients who are demanding diverse expertise.

Mr. Horn, who said that all of Graystone's clients use multiple managers, said that the change is not necessarily a bad one for banks.

Although banks will have less of a chance to manage all the assets for one particular client, Mr. Horn said that there is opportunity for banks to act as overseers of different managers - and have some involvement with such wealthy clients rather than none.

Mr. Horn said that several banks have already approached his firm looking for advice on creating funds that bring together up to eight different investment managers. The funds tend to be limited partnership funds.

Boatmen's Trust Co., for example, recently announced it was creating such a fund.

"Banks will be able to penetrate the affluent market very well if they're willing to think differently," Mr. Horn said.

Last week, New England Investment also announced it acquired Harris Associates, a Chicago investment management company with $6.5 billion in assets under management.

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