Family Wealth Report speaks to Peter Raimondi, chief executive at Banyan Partners, which was recently acquired by Boston Private Bank & Trust Company.

Last month Boston Private Bank & Trust Company signed an agreement to acquire the Palm Beach Gardens, FL-headquartered independent registered investment advisory firm Banyan Partners - which itself has made a string of acquisitions in recent time - for $60 million in cash and stock.

Boston Private Bank will establish a new, wholly-owned subsidiary combining its existing wealth management business with that of Banyan Partners. The combined operation will have approximately $9 billion in client assets under management and advisement, making it one of largest RIAs in the US.

“At $9 billion this is just the beginning for us,” says Peter Raimondi, founder and chief executive at Banyan. “We don’t have a desire to be the biggest but we can grow dramatically from here.”

Asked about what drove the merger between the two firms, he said: “We weren’t for sale; it was about the unique opportunity. We were much more on the other side of the table in that we were strategically acquiring."

Indeed, in the five years since launching in 2008, Banyan has made seven acquisitions, through which it grew from having $250 million in assets under management to some $4.5 billion today (click here for an interview on the firm's acquisition history and strategy).

Speaking to Family Wealth Report, Raimondi said the firm is “absolutely” still on the hunt for strategic and compelling acquisitions.

“That was one of the attractions for Boston Private, to pick up the business acumen we have in terms of identifying, acquiring and integrating other firms strategically located around the US,” he said. "They have the capital to grow; we have the acumen to identify and integrate."

Boston Private has offices throughout New England, Southern California and the San Francisco Bay Area, while Banyan has additional locations in Boston, New York, Miami, FL, Naples, FL, Atlanta, GA, Wisconsin, Texas and California.

While the two firms already have an overlap in San Francisco and Boston, there are two locations where they currently don’t but will certainly develop: Boston Private has a desire to enter South Florida, while Banyan has a desire to be in Los Angeles.

Additionally, strategic acquisitions in the DC-Virginia area would be “very desirable” for both parties, Raimondi said.

A deeper US footprint

All told, the new entity will be around 150-strong, comprised of 80 and 70 staff from Banyan and Boston Private respectively.

Of Boston Private's 70-strong wealth management team, 45 are based in Boston, where Banyan too has 30 employees as a result of its previous acquisition of Silver Bridge. While the executive team of the new entity will be split between Boston and Florida (Banyan's headquarters) the legal entity will be in Boston.

“I’m up there once a month for my Boston team, but I'll be going a bit more often,” Raimondi said. “We’ll be combining their 45 with our 30 to create a force of about 75.”

Deal details

After the deal, Boston Private Financial Holdings' total client assets in its wealth management businesses (including trust) are expected to expand to approximately $30 billion of total client assets.

On a pro forma basis, the move is expected to result in an increase in the consolidated, non-spread based revenue to around 45 per cent of total revenue, “significantly advancing the company towards its stated aim of creating a more fee-weighted revenue stream,” Clayton Deutsch, CEO and president of BPFH, said when the deal was announced in July.

Meanwhile, when the transaction closes in the final quarter of 2014, Raimondi will become CEO of the new wealth management firm while key members of both management teams will assume senior roles in the new entity. Boston Private's executive vice president, John Sullivan, will be the new entity's chief business development officer and R Thomas Manning, Banyan Partner's chief investment officer, will become CIO.

The two firms are still in the process of deciding on what the name of the new company will be.

A “meeting of minds” 

The move added weight to a wave of M&A activity in recent months and years in the wealth management arena and financial services industry at large.

Raimondi highlighted that Boston Private already has a $4.5 billion-strong investment and wealth management strategy, so the firm didn’t need to acquire Banyan to enter the space, for example.

However, Boston Private had in fact been looking to extend its wealth management business, and this was an opportunity too good to miss - on both sides.

“It was a voluntary meeting of the minds…of what we could create together that would be much more unique and successful than what the two of us could do separately,” Raimondi said.