Banks have a renewed appetite for registered investment advisors, Pershing Advisor Solutions and FA Insight report. An update this week to their “Real Deals” M&A report says that five of the seven deals involving RIA acquisitions in the second quarter involved banks and/or trusts on the buying side. That’s up from just one deal in the first quarter. The findings appear to echo similar results by Schwab Advisor Services this month that found that 23 percent of RIA buyers in the first half of 2011 were banks, up from just 1 percent in all of 2010.
Although Schwab was reluctant to call a trend because of the short time frame, Pershing was not. “The most surprising trend of the quarter is the notable increase of bank and trust acquirers,” the update says. “Despite frequent generalizations that banks do not have the capital nor the focus for maintaining an active acquisition presence, it appears that a subset of firms has a solid balance sheet with the means and motive to consider RIA purchases.”
Among the noteworthy deals cited was SunTrust Banks Inc.’s purchase of CSI Capital Management of San Francisco, with $1.5 billion in assets under management and a roster of HNW clients that include top professional athletes. SunTrust, based in Atlanta, announced the deal in May. It expanded the bank’s Private Wealth Management division in Los Angeles and Atlanta, and added offices in Greenwich, Conn., Boca Raton, Fla., and San Francisco. Terms were not disclosed.
Greenwich-based Fieldpoint Private Bank & Trust said in May it had bought Analytic Asset Management, giving Fieldpoint a foothold in the Manhattan market. Fieldpoint said the deal added $275 million in AUM.
Another trend that echoed the Schwab report: there were fewer deals last quarter, but bigger companies on the table. Pershing said the RIAs that were bought in the last quarter had median AUM of $800 million, twice the number of the previous quarter. Half the deals involved RIAs with more than $1 billion in assets, it added. Total assets for the second-quarter deals were $8.5 billion, up from $6 billion in the first quarter. Eleven acquisitions were noted in the first quarter compared to seven last quarter.