US Wealth Manager Enters Fast-Growing Managed Accounts Market Through Acquisition

Stephen Harris

27 February 2006

Boston Private Financial is to enter the separately managed accounts market by acquiring a majority interest in Anchor Holdings, a newly created holding company that will own Anchor Capital and Anchor/Russell. Anchor Capital specialises in active investment management for families, trusts, and institutions, with approximately $22 million of annual revenues from approximately $4.1 billion of assets under management. Last year the company received net inflows of funds of $273 million. Anchor Capital services its clients through two divisions, its discretionary management accounts division and its separately managed accounts division, which offer five core disciplines; balanced, all-cap, mid-cap, small-cap and small/mid-cap. Its sister company, Anchor/Russell, structures diversified investment management programs for clients using institutional multi-manager, multi-style, multi-asset mutual funds and separately managed accounts programs sponsored by the Frank Russell Company. Last year Anchor/Russell had approximately $450 million of assets under management. The newly-combined entity will have approximately $4.55 billion in AUMs and $24 million in annualized revenues. "The SMA market is one of the fastest growing segments of asset management, with 16-18 per cent annual growth expected over the next few years. Further, according to industry sources, approximately 20 per cent of high net worth assets are flowing into SMA accounts,” said Timothy Vaill, chairman and chief executive of Boston Private. Under the agreement, Boston Private will acquire an 80 per cent interest in Anchor Holdings, with the remaining 20 per cent continuing to be held by existing management. Boston Private Financial is a wealth management firm that owns twelve independently-operated affiliate partners across the US providing private banking, financial planning/wealth advisory and investment management services to the high net worth marketplace.