Amvescap To Expand Private Client Business

by Carla Johnson, Investors Offshore, London

04 February 2002

Amvescap, the Anglo-US fund manager, has announced that it will rebrand its private wealth management business as Atlantic Trust. Last year the company bought Boston-based wealth manager Pell Rudman for $200m, and this firm will form the basis of further expansion. Amvescap's London-based private-client business will be rolled into Atlantic, adding approximately $2.5bn in assets under management for upmarket investors, small pension funds and charities to the $7.5bn currently held by Pell Rudman.

Chairman Charles Brady said targeting high net worth individuals (HNWIs) had the long-term potential to match the scale of its two existing businesses: providing mutual funds and managing money for pension funds and endowments. "The HNWI business on a worldwide basis is as big as the other two put together," said Mr Brady. "If we only want to be in fund management, then we have to be in all parts."

Amvescap is already one of the largest global fund managers: with more than 8,500 employees, offices in 24 countries, and $361.3 billion of assets under management, the company has a significant presence in the institutional and retail segments of the investment management industry in North America, Europe, and Asia-Pacific. But the private-client business accounted for just 2% of managed assets and 1.2% of revenues in the third quarter of 2001. The company does however have offices in a number of offshore jurisdictions frequently used as a base for alternative investments, including Hong Kong, the Isle of Man, the Channel Islands and Gibraltar.

Atlantic will be headed by Don Herrema, who says that Amvescap is building a family office-style structure in the US and some European countries to provide financial planning and products directly to individuals with more than $5m assets available to invest. Family offices have been one of the fastest-growing and most profitable segments of the wealth management sector, but are also one of the most competitive segments of the market, especially since shrinking returns and higher risk in more difficult equity markets have made clients much more aware of the worth of their wealth managers.

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