Acquisition fever seems to have hit the trust and private banking sphere.
In the past week, two trust companies that cater to affluent clients - TCW Group Inc. and Boston Private Bank and Trust Co. - have announced plans to buy investment management concerns.
Los Angeles-based TCW, parent company of Trust Company of the West, is buying Continental Asset Management, a New York firm that manages $5 billion. The purchase, from Buckeye Union Insurance Co., boosts TCW's assets under management to $50 billion.
And Boston Private Bank purchased Cunningham, Henderson & Papin, a Burlington, Mass., firm with $315 million under management. The deal more than triples Boston Private Bank's managed assets to $465 million.
More banks are looking to increase their money management capabilities - through acquisitions or alliances - in an effort to boost fee income and reach more clients.
The two acquisitions come on the heels of a recently announced agreement between Chase Manhattan Corp. and M.D. Sass to enter an asset management alliance.
TCW was drawn to Continental Asset because of the firm's specialty of managing insurance companies' fixed-income portfolios, a spokesman said. This will provide a fourth arm to the fixed-income capabilities offered by the TCW Group -- high-grade, mortgage-backed securities, and high-yield bonds.
TCW provides investment management services that include the management of pools of tax-exempt capital and other assets for pension funds, endowments, and insurance companies.
Boston Private Bank, in its acquisition of Cunningham, Henderson & Papin, is also picking up three seasoned investment managers: Dudley Cunningham, Ronald H. Henderson, and Gerald A. Papin.
The transaction is likely to double the fee income generated to the bank by asset management to a quarter of the overall fees, said Boston Private Bank president Timothy L. Vaill.
Boston Private Bank, started in 1987, has been laying the groundwork for expansion for two years. The bank, which recently moved to a larger, choice location in downtown Boston, has added several new senior investment management positions and focused on asset management.
"We want to tell the marketplace that we really mean business," said Mr. Vaill. "We want to be a player."
Mr. Vaill declined to disclose financial terms of the transaction, which he said was a combination of cash and stock.