M and A

Summary Of Wealth Management, Bank M&A – March 2023

Editorial Staff April 17, 2023

Summary Of Wealth Management, Bank M&A – March 2023

The collapse and takeover of Silicon Valley Bank in the US and its sister UK business in London were the two main North America transactions. A number of other deals were done in March. In Europe, the largest deal by far was the UBS takeover – with Swiss state backing and no request for shareholder consent – of Credit Suisse.

Here is a roundup of the main M&A deals that affected wealth management and private banking during March. Without any doubt, the collapse of Silicon Valley Bank was the biggest story – a “shotgun” wedding. The US side of the failed business was bought – via the FDIC – by First Citizens Bank, and the UK side of SVB was bought for a nominal price by HSBC. 

SVB, First Citizens Bank
The Federal Deposit Insurance Corporation agreed to let First Citizens Bank take over Silicon Valley Bank, which collapsed into the arms of the FDIC two weeks before. First Citizens Bank & Trust Company, to give its full name, is headquartered in Raleigh, North Carolina. The FDIC statement said the 17 former branches of SVB will open today as First Citizens. Depositors of SVB are automatically under the new bank. All deposits assumed by the firm continue to be insured by FDIC up to the insurance limit.

The FDIC said that as of March 10, 2023, SVB had about $167 billion in total assets and about $119 billion in total deposits. The First Citizens transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank assets at a discount of $16.5 billion. Around $90 billion in securities and other assets remained in the receivership for disposition by the FDIC.

HSBC, Silicon Valley Bank UK
HSBC said its UK ring-fenced subsidiary, HSBC UK Bank plc, had acquired Silicon Valley Bank UK Limited for £1 ($1.21). SVP UK was taken over by the Bank of England after its parent financial group collapsed in March. As at March 10, 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion, HSBC said in a statement to the London Stock Exchange. For the financial year ending December 31, 2022, SVB UK recorded a profit before tax of £88 million. SVB UK's tangible equity is expected to be around £1.4 billion.

UBS, Credit Suisse
UBS bought Credit Suisse for a total of SFr3 billion ($3.23 billion) in an all-stock deal. UBS said the combination of its business with Switzerland’s second-largest bank would create a business with more than $5 trillion in total invested assets. The deal will “further strengthen UBS’s position as the leading Swiss-based global wealth manager with more than $3.4 trillion in invested assets on a combined basis, operating in the most attractive growth markets,” it said. The transaction was not subject to shareholder approval. UBS obtained pre-agreement from FINMA, Swiss National Bank, Swiss Federal Department of Finance and other core regulators on the timely approval of the transaction. The merger is expected to be consummated by the end of 2023, if possible.

Wealth Enhancement Group
Wealth Enhancement Group, which oversees more than $63.8 billion in total client assets, bought Equius Partners, an RIA based in Novato, California. Equius Partners' team of seven financial advisors and five support staff, led by Thomas (TJ) Troutner, oversee more than $1 billion in client assets. The financial size of the acquisition was not disclosed.

Equius Partners was founded in 1993 by Jeff Troutner and Phil Jonckheer.

Steward Partners
Steward Partners Global Advisory welcomed Ensign1 Wealth Partners, a firm based outside Salt Lake City, as its first partner in Utah. Led by Jed Dewsnup and Stephen Calder, the four-person team is based in Farmington, Utah. Ensign1 chose BNY Mellon | Pershing as their custodian for the almost $500 million in client assets on which they advise.

Wealthspire Advisors
Wealthspire Advisors, an NFP company and investment advisor, agreed to purchase Heron Financial Group, a New York City-based wealth advisory firm that manages approximately $300 million in assets. The transaction is expected to close early in the second quarter of 2023, subject to customary approvals and closing conditions. Park Sutton Advisors, a Waller Helms Company, served as advisor and Wiggin and Dana LLP served as transaction legal counsel to Heron Wealth. 

State Street
State Street agreed to buy CF Global Trading, a global firm specializing in outsourced trading on an agency basis for a variety of asset classes including equities, listed derivatives and fixed income. The transaction is expected to be completed by the end of 2023, subject to customary closing conditions. Financial terms are not being disclosed by Boston-based State Street.

Founded two decades ago, CF Global Trading trades across multiple asset classes and will have execution desks in Hong Kong, London, New York and Lisbon (expected to be opened by the time this acquisition closes). 

Carson Group
Carson Group acquired The Shobe Financial Group, a wealth management firm in Baton Rouge, Louisiana. The planning-driven 16-person team, which currently has over $500 million in assets under management, continues to be led by partner and chairman, Ed Shobe and partner and president Jason Windham.

Kelso & Co, Pathstone
Private equity house Kelso & Co took a stake in US-family office Pathstone, highlighting a trend of such investors backing these wealth managers. Lovell Minnick Partners have also invested in the business since 2019. Kelso's and LMP's respective investments, which are expected to close during the second quarter of 2023, are subject to customary closing conditions. Ardea Partners LP served as the exclusive financial advisor, and Alston & Bird LLP served as the legal advisor to Pathstone. Kirkland & Ellis LLP and Republic Capital Group advised LMP. William Blair & Co provided financial advice, and Debevoise & Plimpton LLP served as the legal advisor to Kelso.

Lazard Asset Management
Lazard Asset Management acquired US-based Truvvo Partners, a firm overseeing $4.8 billion of assets under management. As part of the deal, the firms created Lazard Family Office Partners.

The new offering runs a total of $8 billion in assets, including LAM’s existing US private client business; it provides advice and investment solutions across public and private markets. Lazard Family Office Partners integrates investment management, risk management, and family office services into one offering. Lazard’s total wealth management AuM, including assets in Europe, runs to about $22 billion. 

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