Solamere Capital partners invest in Charlotte-based wealth-management firm. A group of New England-based private-equity investors -- including the eldest son of 2008 U.S. presidential candidate Mitt Romney -- is backing a new Charlotte, N.C.-based investment advisory started by group of former Stanford Financial Group advisors. The founders of Solamere Capital see Solamere Advisors as a good bet because of its principals' experience and strong ties to prospects in the Carolinas, its high-touch and holistic approach to family-wealth management, and an overall trend favoring independent boutiques over full-service giants.

"We're very excited about this investment opportunity," says Tagg Romney, a managing partner of Lexington, Mass.-based Solamere Capital. "Like us, they're focused on customer service at a very high level."

Romney co-founded Solamere Capital last year with Eric Scheuermann and Spencer Zwick to facilitate private-equity deals that come to its attention through its founders' ties to successful business builders and top executives.

Solamere Advisors, however, is a personal investment for Romney and the other Solamere Capital investors rather than one of the Massachusetts firm's portfolio holdings.

From Solamere Advisors' perspective, the participation of Romney and his associates underlines the startup's commitment to service and transparency. "We were looking for investors with impeccable reputations," says Solamere Advisors' Stephen Wilson.

Out from under

Wilson and most of his colleagues at Solamere Advisors might well like the look of clean hands after surviving Stanford Financial's abrupt and calamitous demise this past winter.

U.S. authorities shuttered Houston-based Stanford Financial in February 2009 on the suspicion that it was swindling investors in an elaborate book-cooking scheme run out of its subsidiary in Antigua. Regulators throughout Latin America and the Caribbean quickly followed suit, and a U.S. federal court subsequently ordered the firm's assets frozen.

Stanford Financial's founder and chairman Allen Stanford -- or Sir Allen Stanford by virtue of the cricket-loving Texan's Antiguan knighthood -- was arrested last month and charged with fraud. He pled "not guilty" a few days later. Since then Stanford Financial's former CFO James Davis has agreed to testify against Sir Allen.

However harrowing the Stanford Financial experience may have been, the association was brevity itself for five of Solamere Advisors' 11 principals. That part of the team joined from Charlotte-based Wachovia's Wealth Management Group late in 2008. Another five of them joined Stanford Financial from Memphis, Tenn.-based Morgan Keegan's private-client group in 2007. One, Kristin Lewis, came directly from Wachovia (now part of San Francisco-based Wells Fargo) without a stopover at Stanford Financial.

Morgan Keegan veteran Timothy Bambauer and Wilson, a former Wachovia advisor, are Solamere Advisors' co-managing partners. Joining them in the firm's investment-service division are Brandon Phillips (out of Morgan Keegan) and Peter Jespersen (Wachovia). Leila Evans (Wachovia) and former Morgan Keegan employees Deems May, Bryan Cannon and Amanda Hogan make up the firm's client-service squad. In planning and fiduciary services are ex-Wachovians Stephen Barber, Laura Richards and Lewis.

Taken together, Solamere Advisors' principals have nearly 120 years of financial-service experience.

Solamere Advisors will try to distinguish itself from its competitors "by combining a progressive asset allocation strategy, total flexibility in selecting third-party financial products and unparalleled customer service," according to Evans. "We respond to the need [clients] feel in these volatile times for a lot of hand holding -- even if that means having fewer clients."

To facilitate its commitment to providing a broad range of non-proprietary investment products and services, Solamere Advisors has selected the Bank of New York Mellon 's Pershing subsidiary for clearing and custody services and Belmont, N.C.-based Capital Guardian as its introducing broker-dealer. Its manager research and due-diligence provider is Darien, Conn.-based Rogerscasey.

"We provide complete open architecture," says Evans. "We're able to go out and choose what best fits the needs of our clients -- and, what's so important these days especially, we're able to do it in a context of a financial plan that's tailored [to] each client."

Solamere Advisors' "sweet spot" is likely to be individuals, families and institutions with between $2 million and $30 million in assets, according to Evans. And, though it boasts relationships throughout the U.S., the bulk of its clients are likely to be based in North Carolina and South Carolina, where the firm's principals draw on "a tremendous client following," she adds.

Solamere Capital and what would become Solamere Advisors got wind of each other through Dragonfly Capital, a Charlotte-based investment bank.

The first thing about Solamere Capital that caught the Charlotte group's eye was its client-centricity. "Like us, they really pay attention to their clients."

Solamere Capital in fact calls itself a multifamily office -- not because it offers traditional family-office services such as portfolio management, financial- and legacy-planning, family governance and concierge services, but because it goes to such lengths to provide its mainly centa-millionaire clients with access to plum investments.

"We market [ourselves] as a multifamily office because of the very high level of service we provide as a personal private-equity fund for our limited partners," says Romney -- who adds that he was impressed by the former Stanford Financial team's similar commitment to client service. "We focus on providing high-level customer service in a family-office setting."

One thing Solamere Capital's investment in Solamere Advisors isn't about is "synergy." Romney sees a chance of "Solamere Advisors' clients having access to private-equity products" derived from Solamere Capital, but that's about it. Referrals to Solamere Advisors from Solamere Capital are apt to be rare for the simple reason that the private-equity firm's ultra-affluent limited partners are pretty much squared away on the wealth-management front; some with family offices of their own.

"Regardless of any synergies, we thought [Solamere Advisors] was a very good investment," says Romney.

Although its perception of Solamere Advisors' intrinsic merits was the clincher for Solamere Capital, Romney says it's also true that emerging market trends favor savvy independents over the larger firms that have traditionally held sway in Solamere Advisors' target market -- especially in light of the recent turmoil on Wall Street.

"People who were historically confident being at large institutions from the standpoint of safety are now realizing that may no longer be the case," says Romney. "These people are turning to boutiques with more of a focus on customization; they're realizing there may be more safety in smaller settings." -FWR

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