Banyan Partners chief executive, Peter Raimondi, speaks to Family Wealth Report about its spate of recent acquisitions and its strategic direction going forward.

Banyan Partners, the independent wealth management and investment advisory firm which in June bought Boston, MA-based Silver Bridge Advisors, last month further expanded its national footprint by acquiring Texas-based Rushmore Investment Advisors and Holt-Smith Advisors in Wisconsin.

In the five years since launching in 2008, the Palm Beach Gardens, FL-headquartered firm has made seven acquisitions, through which it has grown from having $250 million in assets under management to some $4 billion today. Its core offering consists of investment management, wealth management (retirement, estate and succession planning), and family office services.

Peter Raimondi, founder and chief executive of Banyan Partners, recently spoke to Family Wealth Report about how he believes the firm will probably be at $10 billion in AuM in three years.

Acquisitions must, however, be “compelling” so as to benefit both Banyan and the target firm. “If it’s simply a matter of layering on AuM to get to some number, I’m not interested. One plus one has to equal three,” Raimondi said.

A look back

By way of background, Banyan kicked off its acquisition trail in 2009 with the purchase of Oaktree Asset Management in New York. It bought Florida-based Weiss Capital Management and Colonial Wealth Management in Boston in January 2011 and then took over Earl M Foster Associates the following November. The latter acquisition enhanced Banyan’s presence in the Latin and Cuban American community, Raimondi said at the time.

By the start of 2012, Banyan had about $1 billion under management, a couple of family office clients and around two dozen “very serious” high net worth wealth management clients, Raimondi said. “Word was out that we were looking to grow geographically, as well as from a team perspective, to really build out the wealth management family office component.”

He added: “Silver Bridge did a lot of open-architecture, asset allocation and virtually none of the customization we did. They had a very strong focus on fixed income, which we did not. The two of us came together at a good time. I needed to take the business from $1 billion to $3 to $4-5 billion.”

When Banyan announced its acquisition of Silver Bridge in June, chief strategic officer Scott Dell’Orfano said the firm’s strategy was to achieve organic growth and attract “synergistic” businesses.  The deal with Silver Bridge gave Banyan its first West Coast branch.

Thomas Manning, CEO and chief investment officer of Silver Bridge, became CIO of the combined firm, while Michael Blackmon, Banyan’s CIO became executive director of portfolio management. The former CEO of Oaktree Asset Management, meanwhile – Banyan’s first acquisition in 2009 - was a managing director in New York.

“What we were looking to do was build a team of really strong investment-centered people, led by one investment thesis and overseen by one CIO - that is very different than any other RIA in the space today,” Raimondi said.

“But how do you do it when you’re 1,000 miles away? We will not acquire someone if we don’t think they have a good culture fit. We go through a lot of analysis with all the individuals at the firm ahead of time. The transition needs to be non-disruptive and seamless.”

Interestingly, Raimondi said there aren’t a lot of compelling opportunities out there: “If we never made another acquisition I think we’d be perfectly content with our size. We have about 89 people spread across seven or eight cities in nine offices. We are a very good size to handle virtually any client from the UHNW family office client down to smaller portfolio management.”

Company structure

Raimondi said he believes very strongly in employee ownership when building a “sound firm,” highlighting that Banyan currently has 27 shareholders.

“Almost every seller will ask me about the succession plan of the firm, and that is an important question to ask. We built this company with three internal and four external members on the board. We built it as a corporation…it wasn’t built to run like a typical RIA which is ‘founder-owns-90 per-cent-of-the-equity’ with no succession plan in place. We have executives who are in their thirties, a large segment between the ages of 40 and 55, and then we have a senior executive crew between 55 and 75. And that has a lot to do with who we’ve acquired, how we’ve acquired them and how we’ve grown the firm. There are three layers of age brackets that are already in management,” he said.

According to a November 2012 survey by US Trust, many high net worth business owners are so “caught up” in their efforts to create jobs and opportunities for others that they are at risk of jeopardizing their own employees as well as their families’ financial security. The findings pointed to a worrying lack of financial preparation, with 55 per cent admitting that they don't have a formal succession plan for their business, including 43 per cent of those over the age of 67.

Client base, target regions  

Banyan’s “bread and butter” – representing 80-90 per cent of the firm’s client base - are HNW individuals with at least $5 million in investable assets. But the firm also has a “burgeoning” family office division off the back of the Silver Bridge acquisition and is thus looking to strengthen that unit going forward, Raimondi said.

At present, Banyan has regional offices in New York, Boston, MA, San Francisco, CA, Atlanta, GA, Naples, FL, Coral Gables, FL, Madison, WI and Fort Worth, TX. In terms of where Raimondi would like to see the firm expand into next, the “missing East Coast piece” is the Washington DC-Virginia area, he said.

“A physical presence in the mid-Atlantic/Charlotte/DC region would be great. As we go West, Chicago, San Diego and Los Angeles would be the clear next markets for us.”

When asked about the origin of the name Banyan Partners, Raimondi said that branding is very important to him.

“Most RIAs are named after the founder or have some sort of financial aspect to their name - but I always thought that to be inappropriate,” he said.

He explained how Banyan trees – originally imported from India - are “beautiful, huge and very unique” trees. “They shoot down these roots to support the massive span of the tree which becomes wider, supported by the roots that turn into trunks. It’s a perfect symbol of wealth protection.”