Los Angeles, Texas and major east coast cities are being targeted by Evercore Wealth Management as the New York-based firm zeroes in on its hunt for opportunistic strategic acquisitions - and ultra-high-net-worth clients.
"You have to go where the money is," says Evercore chief executive Jeff Maurer. "We now have a business in San Francisco, so Los Angeles is a logical target. On the east coast, we're looking at Boston, Philadelphia, Washington, D.C. and Florida. And Texas remains a very appealing market."
Evercore, a subsidiary of the investment banking advisory firm Evercore Partners, is marking its fifth anniversary this month and is approaching $5 billion in assets under management. Evercore targets ultra-high-net-worth individuals and families with between $5 million and $200 million in investable assets.
Families wealthy enough to have their own family offices are "not quite" Evercore's market, Maurer says. The firm is more likely to work with wealthy families that need "some elements" of those services, such as investment management, he adds.
Ultra-high-net-worth clients are looking for a trusted advisor, good performance and "someone who is pro-active and cares about them," Maurer says. While the ultra-wealthy have become more aggressive about seeking investment returns, they remain chastened by the pain of the financial crisis of 2008 and 2009, according to Maurer.
"It's not hard to bring them back to their goals and objectives" that were forged by risk management principles, he maintains.
UHNW SHIFT
But Maurer has seen other shifts in his ultra-high-net-worth clients' behavior.
They are demanding more online access to their accounts all the time, he notes, are more interested in socially responsible investing and philanthropy and want more guidance on how to educate and deal with their children.
To that end, Evercore hired GenSpring veteran Jewelle Bickford last fall as a partner and wealth advisor to build up "the soft side" of the firm's business, including educating heirs, family governance and working on "thoughtful giving" strategies with clients.
Undoubtedly one of Evercore's most potent competitive advantages when it comes to attracting ultra-high-net-worth clients is its high-profile investment banking parent, headed by former Deputy Treasury secretary Roger Altman and former BlackRock president Ralph Schlosstein, who also served as an advisor to President Jimmy Carter.
Wealthy clients are particularly impressed by the pedigrees of Altman and Schlosstein, Maurer says, as well as the high-profile media attention the two executives command.
REFERRALS LAGGING
But client referrals from the investment bank have been lagging, wealth management observers say. Maurer says wealth management referrals have been picking up, but he is clearly hoping for more, citing the firm's "five-year track record" as a benchmark that may spur increased recommendations.
Access to Evercore Partners' capital to fund acquisitions, infrastructure expenses and a hefty payroll for top talent and acquisitions is a considerable advantage, notes Brian Hughes, a consultant specializing in the ultra-high-net-worth market and president and founder of Philadelphia-based Hughes Growth Strategies.
"This gives them a unique edge in the marketplace," Hughes says. "I wouldn't be surprised to see them do one or two more deals in the next few years similar to Lowry Hill."
Indeed, after Maurer and other long-time veterans of U.S. Trust founded Evercore Wealth Management, the firm acquired New York-based asset manager Morse Williams in 2010; lifted out a well-regarded team from Wells Fargo's Lowry Hill Investment Advisors division in Minneapolis in 2011 and bought San Francisco-based Mt. Eden Investment Advisors in 2012.
GROWTH STRATEGY
Some industry observers question Evercore's organic growth, noting that the bulk of its assets have come from former U.S. Trust clients and acquisitions.
The firm's veteran wealth managers have given it "a solid foundation from which to grow," says Stephen Prostano, the former head of Silver Bridge Advisors, which also targets the ultra-high-net-worth market.
But, Prostano adds, "A growth strategy based on attracting breakaway teams may impact the consistency of delivery for a firm. Only time will tell, and the approach taken by management when integrating these teams will have a significant impact on the outcome."
Earlier this month, Evercore advisor Nicole Cost left the firm to join Convergent Wealth Advisors. Convergent said she managed several hundred million in client assets for over 60 clients, but Maurer says he "doesn't anticipate" any clients will be leaving with her.
Maurer says he is confident Evercore can continue to grow by attracting top wealth managers drawn to the firms' culture and equity partnership structure, stressing the firms' reputation for high-end service as well as acquisitions.
FORMIDABLE COMPETITON
JP Morgan and Goldman Sachs are Evercore's most formidable competition for the lucrative ultra-high-net-worth market, Maurer says, as are "all" of the high-end independent wealth managers.
One of those competitors says Evercore's success to date has been inspiring.
"Competing directly with large financial institutions in the investment management arena is not an easy task, but firms like Evercore are proving there is an opportunity for new entrants," says former GenSpring family Offices executive Michael Zeuner, now managing partner for the year-old WE Family Offices, which is also targeting the much sought after ultra-high-net-worth market.
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