Wachovia Corp. announced a deal Wednesday to buy a Waltham, Mass., wealth advisory firm that would extend its wealth management footprint farther into New England, a market in some turmoil after recent bank mergers.
Tanager Financial Services Inc., the nation's 10th-largest independent wealth advisory company, is to become part of Wachovia Wealth Management and its Calibre family-office business. Tanager's Boston office would become Calibre's third site, in addition to offices in Philadelphia and Winston-Salem, N.C.
Wachovia Wealth Management has teams in Connecticut, New Jersey, Pennsylvania, and New York, and Wachovia Securities has two offices in Boston, but this deal would give Wachovia Wealth Management a foothold in Boston for the first time. Tanager, which was established in 1995, has 175 families as customers, with $2 billion of assets. Terms of the deal were not disclosed, but it is expected to close in the fourth quarter.
Stanhope Kelly, the president of Wachovia Wealth Management, said it is "coincidental and fortuitous" that Wachovia is moving into Boston as other companies reevaluate their strategy in that market. After buying FleetBoston Financial Corp., Bank of America Corp. made 700 layoffs in Massachusetts and 665 more in the rest of New England, but it announced plans last week to move its wealth and investment management businesses to headquarters in Boston, a community angered by the layoffs.
Wachovia is determined to expand its wealth management footprint in attractive markets, Mr. Kelly said. Wachovia Wealth Management is also opening an office in Dallas and opened its first in Manhattan last year.
"Other markets are attractive for further acquisitions," Mr. Kelly said. "In the near term, we are looking at expansion in other Texas markets such as Houston and San Antonio. Over time, we will continue to look for opportunities in this business. We tend to look for large urban markets where we can partner with the right firm."
Mr. Kelly said acquisition is the final phase of a three-part strategy for his unit. After completing its merger with the former First Union Corp., the wealth management unit spent time developing wealth management business within the new Wachovia's footprint. It now has 50 wealth management teams deployed along the East Coast.
The wealth management unit also wants to continue opening offices in markets where the parent company makes acquisitions, he said, and this is why the unit is putting offices in Dallas and Birmingham, Ala.
Mr. Kelly said the Tanager deal in the Boston area is a model of what other deals may look like.
"This is a very, very attractive market, and we have a strong company," he said. "We want to build partnerships like this one in Boston in other strategic markets."
Calibre is one of the largest multifamily offices in the United States, with more than $10 billion of assets from 180 families. Joining Wachovia will enable Tanager to offer clients a more comprehensive array of services than it could on its own, the company said, including fiduciary services, expanded charitable services, credit, and more flexible financial information and reporting systems.
Tanager's wealth and family-office groups will continue to work in tandem, serving client families with investment assets ranging from $1 million to hundreds of millions of dollars.
