TD Waterhouse of New York is now replicating the growth-through-acquisitions strategy it has employed in the U.K., in the rest of Europe through the creation of an online discount brokerage joint venture with Banque Generale de Luxembourg.
TD Waterhouse has built a business serving 500,000 investors in the U.K. within the past two years by acquiring three major brokerage companies, according to a TD Waterhouse spokesperson. TD Waterhouse acquired Sharemarket of Manchester, England in October 1998, Dealwise of Leeds, England in May 1999 and Yorkshire of Bradford, England in November, 1999, according to the spokesperson. In 1999, in the middle of these new acquisitions, TD Waterhouse renamed the companies it had previously acquired in the U.K., the spokesperson said.
TD Waterhouse and its joint venture partner, Banque Generale de Luxembourg, an 80-year-old private bank, are planning to offer a discount brokerage service by the end of the year throughout Europe, said Bharat Masrani, executive vice president of TD Waterhouse Group of London. The joint venture was announced July 27.
TD Waterhouse and BGL hope to distinguish their service from those of other fund companies that are rushing to set up fund supermarkets in Europe for the mass market, by targeting high-net-worth investors with $200,000 or more in investable assets, Masrani said.
BGL has market research data projecting tremendous growth of the self-directed high-net-worth investor, Masrani said. He declined to disclose details.
"The next generation of people in the high-net-worth category - that is the segment we are after," Masrani said. "They are far younger than you would imagine."
The new service, which has yet to be named, will offer investors mutual funds, unit trusts and U.S. and European securities. Initially, it will only offer the eight mutual funds that TD Waterhouse Group currently sells in the U.K., Masrani said. Eventually, however, the firm hopes to become a full-fledged discount brokerage and fund supermarket offering at least 9,000 funds, as TD Waterhouse Investment Services does in the U.S., Masrani said.
TD Waterhouse and BGL will operate the European supermarket from their existing offices in the U.K. and Luxembourg but are planning to also open branches in other locations known for their wealthy and famous residents, Masrani said. Monaco, Switzerland and the Channel Islands are leading contenders, he said.
TD Waterhouse currently has no advertising or marketing plans for its European discount brokerage service, Masrani said. The company will rely on Banque Generale de Luxembourg to spearhead those efforts, he said.
TD Waterhouse Group of London is also considering other acquisitions and joint ventures to further expand the company's European reach, Masrani said.