Many large money managers have been divesting in the past few years to focus on core businesses, but Invesco Ltd. retained its trust unit, Atlantic Trust.
The decision is paying handsome dividends.
2009 was a record year for the Atlanta trust company, said Jack Markwalter, its chairman and chief executive, as it attracted $400 million of new assets. The fourth quarter was its 11th consecutive quarter of positive net flows.
"Even through 2008, when competitors had outflows, we had inflows," Markwalter said. "It has been growing at an accelerating rate ever since."
In 2009, Atlantic Trust increased its assets under management 13.4%, to $15.2 billion, from a year earlier. Markwalter said he expects double-digit growth this year.
Markwalter attributed Atlantic Trust's growth to its model. Its average client has assets of $10 million to $20 million.
"People want to work with a pure-play wealth management firm," the CEO said in an interview last week.
"They don't want to be a part of a bank with all of the intrinsic conflicts of interest."
To continue adding assets, Markwalter said Atlantic Trust must continue to improve customer service.
"Offering the highest-quality client experience leads to referrals," he said. "Through the downturn, we saw existing clients consolidating assets with us. Assets that were held at other firms came to us, and we generated referrals from new clients because of the service we offered our customers. Our philosophy is that if we do an excellent job for our clients, more wallet share and referrals will follow. That is our growth strategy."
Atlantic Trust's client retention rates improved during the downturn, Markwalter said, as did its customer wallet share. The company did some selected marketing campaigns, but most net inflows in the past two years came from existing clients consolidating assets and referring friends to Atlantic Trust.
"Navigating the downturn was all about communication," Markwalter said. "We did conference calls and remained transparent to our clients. It was all about surviving."
Atlantic Trust uses a fee-only business model. "We are much more of a trust company than a brokerage company," Markwalter said. "This is really important, especially when we compare ourselves with the bigger broker-dealers. We are totally trying to align ourselves with the client and provide them solutions rather than just products."
By working with Invesco, Atlantic Trust can offer its customers a full menu of investment products and services, Markwalter said.
The trust unit has grown rapidly since 2004, when it bought Stein Roe Investment Counsel LLC from Putnam Lovell Equity Partners LP. The acquisition added more than $7.3 billion of assets under management, more than doubling Atlantic Trust's business.
Markwalter said that although Atlantic Trust will continue to consider acquisitions, organic growth will remain "the primary focus for the foreseeable future."
Analysts said Atlantic Trust is well positioned for growth because it can tout its performance during the downturn. Its affiliation with a strong parent like Invesco, which has a complete lineup of investment products and services, also helps.