Tiedemann Wealth Management is expanding to San Francisco.
The privately owned New York-based firm, which has more than $4 billion in assets under management, is opening its fifth office in San Francisco this summer, adding to its existing field offices in Los Angeles, Palm Beach, Fla., and Wilmington, Del.
And the 12-year-old firm has other cities in its sights, including Austin, Texas, and Chicago, says Michael Tiedemann, one of the firms founders and its chief investment officer.
The organic expansion plan sets Tiedemann apart in the wealth management space, where many firms recently have opted instead for an acquisition strategy, which brings an instant infusion of assets and revenues.
The hurdle for us to acquire is so high, its unlikely to happen, says Tiedemann, who is also a senior managing partner. The number of things that would have to align, such as culture, as well as a similar approach to investing, service and the partnership model, would make it very challenging.
Tiedemann adds that organic growth is better suited to the firm's target clients: ultrahigh-net-worth individuals with at least $20 million in investable assets.
The onboarding process for wealthy clients can be quite lengthy, Tiedemann says. It can take approximately six months to get a clear understanding of all the familys dynamics and service needs. If you buy a business and have to integrate dozens of families, you have to do them all at once. You can grow your top line quickly by acquisitions, but were not convinced its the most profitable way to grow the business long-term.
San Francisco is well suited for the firms personalized style, Tiedemann says.
San Francisco is very divided between old money and new money, he notes, and you need to be prepared to change your approach. There are a lot of open-minded people in San Francisco who are also very smart and very busy, and they want a customized approach to wealth management.
Thats one reason why that the firm doesnt outsource its investment platform, he adds.
We want to be able to control the investment management selection process, he says. We call it the tangibility of decision-making. We want to sit down with our managers, talk to them, look them in the eye, see what theyre thinking, and see how they treat their personnel. The human element is still extremely important, and asset management is the most important part of the business, so why would you outsource it?
WALL STREET ROOTS
Tiedemanns focus on the UHNW market has been bolstered by its Wall Street roots.
Michaels father, Carl, another co-founder of the firm, was a former president of the venerable but now defunct Wall St. firm Donaldson, Lufkin & Jenrette; he also founded the hedge fund Tiedemann Investment Group.
Those ties, Tiedemann said, make for a very, very strong network.