Mellon Financial has agreed to purchase Safeco Trust Co. from Safeco Corp., and the deal is expected to be completed by the middle of next month.
Safeco Trust, the Seattle-based Safeco subsidiary that handles estate planning and other services to families with $1 million or more in assets, is Mellon's fifth private wealth management acquisition in the past four years. Terms of the deal were not disclosed.
Said Mellon CEO and Chairman Martin G. McQuinn: "This acquisition increases our value for high-net-worth clients, as we continue to intensify our strength as a provider of the highest quality wealth management capabilities."
Safeco Trust manages more than $300 billion in assets. For the parent company, the selling is part of a strategy announced last year to sell off subsidiaries in order to spend more time on property and casualty coverage.
RBC Opens Prime Broker To Serve Hedge Funds
Royal Bank of Canada has quietly started a U.S. prime brokerage operation in New York to tap into the growing market for hedge fund services. RBC Hedge Fund Services offers settlement, clearing, custody, financing and reporting services to hedge funds.
Peter Sanchez, the global head of prime brokerage and operations in Royal Bank's global treasury services division, is leading the unit. Sanchez, who also oversees the parent company's Canadian prime brokerage operation, is a former Greenwich NatWest Markets executive who joined Royal Bank 15 months ago.
Gordon M. Nixon, Royal Bank's chief executive and president, said the new brokerage unit is part of an effort to expand institutional offerings and sales in the United States. Royal Bank decided to get into prime brokerage because "it's a high-margin, fee-based business," Nixon said at a Montreal conference sponsored by National Bank Financial.
The new unit will have a cross-border flavor, because it will work closely with the Canadian prime brokerage, he said.
Hedge funds are one of the fastest-growing areas of financial services. By some estimates, the number of funds could reach 10,000 worldwide within two years. Exact figures are hard to come by, since the funds are largely unregulated.
Elizabeth Rowe, a senior consultant at the New York financial services research firm Find/SVP, said more hedge funds means a growing demand for back-office services. "The hedge fund market is booming and will continue to boom, which means there are increasing opportunities for [back-office service] companies," Rowe said.
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