Mellon Financial Corp. hardly sounds done making acquisitions to expand its private wealth management unit, which includes separately managed accounts.
Craig R. Sutherland, national director for the Pittsburgh banking company's private wealth management group, said that the Boston unit wants to buy more such boutique firms, especially in New York, Philadelphia and California. Sutherland made his remarks the day after Mellon announced it had bought Arden Group of Atlanta. The July 31 acquisition marks the fourth purchase for Mellon's private wealth management group in less than three years. Mellon acquired Weber Fulton & Felman in 2002, Van Deventer & Hoch in 2001, and The Trust Company of Washington in 2000.
"We definitely have an expectation to continue to grow and invest significantly in the private wealth business," Sutherland said. "We are trying to find businesses that can be strong footholds for us. We are looking for the best people. We want to find firms that have excellent representatives that are well skilled and have established tenures within the community they serve."
After acquiring Arden's $750 million of client assets, the Boston outfit has $69 billion of assets under management with 60 offices in 14 states. These include California, Colorado, Connecticut, Delaware, Florida, Georgia, Kentucky, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania, the District of Columbia and Washington. Further expansion plans include those places and moves into Texas, the Midwest around Chicago and the western coast of Florida. Mellon, which is also parent company to The Dreyfus Corp., has $3.1 trillion of assets under management.
The Arden deal, which was originally announced April 7, was the parent company's first acquisition in the Atlanta area, Sutherland said. The price of the Arden deal was not disclosed.
"Atlanta itself is an attractive community for our services," he said. "The Arden Group has a significant presence in the community and has established relationships with high-net-worth individuals and families there. This is the model of what we are about. They have a strong balance of wealth management and investment management."
The purchase of Arden, which is now using Mellon's name, complements Mellon's Florida presence and the private wealth management group's goal of using "logical brand connections" to expand nationally, Sutherland said.
Mellon has been trying to stitch together a national network to expand its private banking business since selling 326 retail branches to Citizens Financial Group in December 2001. In October the group announced it would open 25 private wealth centers in Pennsylvania, Maryland and New Jersey.
Burton Greenwald, president of
B.J. Greenwald & Associates in Philadelphia, said buying small boutique firms is a sound strategy for a large bank looking to expand its separate account and wealth management business.
However, Greenwald warned that in the separate account space, "bigger isn't always better. Firms have to look at each acquisition strategically and proceed with caution."
Sutherland said Mellon does that. "We may have 25 discussions going on at any one time that could narrow to three or four potential deals," he said.
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