Five down, two to go for Wilmington Trust Corp.
When the Delaware company completes its deal for Bingham Legg Advisers LLC of Boston this summer, it will have operations in all but two markets — Chicago and San Francisco — of the seven that the head of its wealth advisory business said account for about half of America's ultrawealthy individuals.
Rounding out the list of seven are New York, Philadelphia, southern Florida, and Southern California.
Now Wilmington Trust wants to make an acquisition in Chicago, said Rodney P. Wood, an executive vice president of the company and the head of the wealth advisory business.
Chicago is "a natural place for us to expand to and then market from," Mr. Wood said, because it would provide a hub in the Midwest from which Wilmington Trust could reach out to customers in Minneapolis, St. Louis, Cleveland, Columbus, Ohio, and Detroit.
"Our preference is to find the right kind of partner and get there through an acquisition rather than through anything de novo," Mr. Wood said in an interview last week.
"The payback is just too slow when it comes to a de novo initiative," he said. "Making an acquisition, like we did with Bingham Legg in Boston, will allow us to ramp up quickly."
Wilmington Trust has made a series of investments in recent years to expand its wealth advisory business.
Last year it added more family wealth advisory offices on the East Coast; opened wealth advisory offices in Connecticut, New Jersey, and Pennsylvania; and added fundamentally indexed and multimanager real-asset mutual funds to its offerings.
The company has $46 billion of assets under management. It has offices in New York; Stamford, Conn.; Princeton, N.J.; Philadelphia; Lehigh Valley, Pa.; Baltimore; northern Virginia; Atlanta; and Florida.
"We have been able to make reasonably significant acquisitions at a pace of about once every other year," Mr. Wood said. "This isn't really by design, but that is just how these things have happened. We are probably unlikely to do a couple at the same time.
"We are not really an acquisitive company," he continued. "We are not just buying as part of a growth strategy; this is really an expansion strategy. We want to acquire when the right opportunity presents itself. We have to look a lot to find a few deal that make sense."
Many high-net-worth providers are salivating over Texas, but Wilmington Trust is not one of them.
"To me Texas is a big state with as many as seven different markets in it," Mr. Wood said. "It may be somewhere we end up eventually, but it is certainly not a high priority for us right now."
Dallas is a separate market from Houston, and Houston is separate from San Antonio, Mr. Wood said.
"To say you intend to develop a presence in Texas is only part of the answer," he said. "It may require two or three acquisitions to really be in Texas."
Wilmington Trust "doesn't need to be everywhere, it just needs to be in key markets," Mr. Wood said.
"We have prospects and customers all over the country," he said. "They are not coming because we are geographically convenient, they come because of our capabilities and our family office services."
Analysts said that Wilmington Trust is a well-established leader in ultra-high-net-worth asset management and said its strategy of acquiring in a market and then building around that acquisition is well tested.
"Large providers like to have a beachhead and then build around it," said Geoffrey Bobroff, the president of Bobroff Consulting in East Greenwich, R.I. "It is a much safer bet to start with a pool of assets and a strong pool of customers."
Mr. Wood said the Boston market was not even on Wilmington Trust's radar when it agreed to buy Bingham Legg, a wealth manager specializing in tax-sensitive investment strategies for high-net-worth individuals and families. But the acquisition would bolster the company's East Coast operations.
Bingham Legg was formed in 1999 as a joint venture between the Boston law firm Bingham McCutchen LLP and Legg Mason Inc., a Baltimore asset manager. Through the first quarter it was managing $1.5 billion of assets and supervising $887 million of assets.
The Bingham Legg deal was announced May 7. Mr. Wood said that Bingham Legg would take the Wilmington Trust name, and Peter E. Simmons, the Boston firm's president and chief executive officer, would become the president of Wilmington Trust's wealth advisory office in Boston.
The price of the deal was not disclosed.
