James McDonald, president and CEO of
Rockefeller & Co, the US-based wealth management firm, believes
fragmentation in the ultra high net worth market will give his
business the chance to develop into a “large boutique structure”
through acquisitions.
McDonald,
speaking after his presentation at Private Banker International’s
Wealth Management Summit in Singapore, said Rockefeller & Co
was on the lookout to acquire businesses with a common culture and
goals.
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He said: “The ultra high wealth market is very
fragmented and we think there are a lot of organisations that don’t
really have the scale, despite having good client contacts, skill
sets or locations. They don’t have the resources for systems
compliance, quality investment personnel and great relationship
managers, so there’s a natural consolidation [opportunity].”
There are an estimated 500 to 1,000
single-family offices in the US, and 2,500 multifamily offices,
with estimated combined assets under advisement of $1.1 trillion.
Rockefeller & Co was set up in 1882 as the family office of
John D Rockefeller. But it has developed into a globally-focused
wealth manager serves the ultra high net worth (UHNW) segment. The
business incorporated in the US in 1979 and became a SEC-registered
investment adviser in 1980. It had $28 billion in assets under
administration at the end of September, employing 256 staff. SG
Hambros recently took a 37 percent equity stake in the business to
form a global alliance to address the ultra high net worth market
(see
PBI 238).
McDonald said: “We evolved from a true SFO to
a business that is overtly interested in making the same quality
and trustworthy integrated services available to other families on
a profitable basis. All of the wealthy families in the world made
their money through very good, profitable business, and we’re not
ashamed to say we’re trying to the same thing in this space.”
With growing levels of distrust among clients
at private banks, who have seen their fortunes eroded in the market
downturn over recent months, it is thought there are new
opportunities in the ultra high net worth space.
McDonald added: “We sense tremendous need. We
feel many of these families are getting quite bad advice, and quite
cynical products thrown at them.”
