UPDATE: Barclays Wealth Plans Expansion In US, Latin America
July 01 2009 - 4:26PM
Dow Jones News
Barclays Wealth, a unit of 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 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 Wealth 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. Barclays Wealth has boosted its total
assets under management to $235 billion, as of Dec. 31, from $156
billion in 2005. The firm has 1,650 professionals who work with
clients in 25 countries, up from 700 in 17 countries three years
ago. In addition to the U.S., the firm added offices in South
Africa, India and Qatar in 2008.
Within the Americas, Barclays Wealth 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 - those with assets they can invest 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. as a wealth manager 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 Wealth 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 the firm will be "pretty active in evaluating
acquisition opportunities."
Barclays Wealth 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.)