Barclays Wealth Unit Plans Expansion In U.S., Latin America
July 01 2009 - 3:43PM
Dow Jones News
Barclays PLC (BCS) plans to hire up to 200 high-end investment
representatives over the next four years in a move to expand its
new wealth management foothold in the Americas.
Following the collapse of Lehman Brothers Holdings Inc. (LEHMQ)
into bankruptcy, Barclays acquired Lehman's private investment
management unit to gain a presence in the coveted U.S. market.
Since then, the U.K. bank has recruited roughly 50
representatives - the firm's name for financial advisers. Nearly
half of the new additions were top producers, who had an average
annual production of roughly $2.9 million and managed more than
$350 million in client assets.
Barclays also has its sights set on potential acquisitions, both
in the U.S. and Latin America, which it sees as a key growth
region.
"While most firms will struggle for a number of years with these
very large integrations, a lot of overlap, and a lot of downsizing,
we're going to be executing a very significant growth plan with a
positive brand," said Jack Petersen, chief executive of Barclays
Wealth Americas.
That strategy is part of Barclays' push to gain a larger share
of the global wealth market. The bank has boosted its total assets
under management to $235 billion, as of December 31, from $156
billion in 2005. Barclays has 1,650 professionals who work with
clients in 25 countries, up from 700 in 17 countries three years
ago.
Within the Americas, Barclays has 13 offices and 250
representatives. With its recruiting outlook, the company expects
to reach a total of 450 to 500 advisers. In sharp contrast to some
of its competitors, clients of Barclays include only the richest of
the rich - investors with investable assets of $10 million and
above.
"The strategy for us has always been to focus on the higher end
of scale in the U.S. There are people do very well selling to
retail, but we're not interested in doing that," said Tom Kalaris,
chief executive of Barclays Wealth.
Some of Barclays' recent new recruits include high-producers
Adam Shafiroff, Maureen Clancy and Zamir Siddiqi, who joined from
Royal Bank of Canada (RY), Bank of New York Mellon Corp. (BK), and
AllianceBernstein Holding L.P. (AB).
Barclays' growth in the U.S. came after it spent several months
evaluating opportunities there. Barclays determined that building
the wealth management unit organically would be expensive and take
no less than five years. Instead, Lehman's downfall gave Barclays
access to a high-net worth business that focused on asset
allocation and had a familiar culture.
"There's two type of acquisitions - the strategic one and the
opportunistic one...This one was both, in my opinion," said Robert
Ellis, principal and head of Wealth Management at Novarica, a
research and consulting firm.
With Barclays' projected growth forecast, Ellis said, the wealth
manager would compare favorably with Credit Suisse Group (CS),
whose U.S private bank has 15 offices and 400 relationship
managers.
With considerable merger-and-acquisition activity during the
financial crisis, Barclays expects to have opportunities to pursue
banks, trust companies, and asset managers that, Petersen said, are
"probably too small from a scale point of view."
He said Barclays will be "pretty active in evaluating
acquisition opportunities."
Barclays also sees Latin America, with its growing economies and
mix of ultra-high-net worth investors, as a maturing market and a
place where it could open more offices. The wealth manager plans to
work closely with Barclays Capital, the investment-banking arm of
the U.K. bank, which has already made a significant push into the
region. Barclays has hired more than 200 professionals to build up
its equities sales, trading, and research capabilities in Latin
America, Europe and Japan as other competitors have scaled
down.
-By Brett Philbin, Dow Jones Newswires; 212-416-2173;
brett.philbin@dowjones.com
(Kejal Vyas contributed to this report.)