Former MSSB Advisor Launches Wealth Management Boutique
What the Pactolus River did for King Midas (allegedly it was the source of his wealth) Alan Harter says he intends to do for his Midas-wealthy clients at Pactolus Private Wealth Management, at least in terms of keeping their revenue streams, if not their lives, running smoothly.
What Harter won't do is give them the falling-through-the-cracks feeling he believes they would get via "traditional investment management models [that] offer cookie-cutter products and a narrow geographic reach, with investments often limited to the exchanges." He left a position as a senior vice president in wealth management at Morgan Stanley Smith Barney to start Pactolus, launching the firm January 28. It is headquartered in McLean, Va., with Harter as managing director, and is geared toward clients high on the wealth chain, with at least $25 million to invest. The firm's assets under management were not available because Harter is still negotiating the terms of his departure from MSSB, according to a firm spokesman.
Pactolus (www.pactoluspwm.com) has about 25 core clients. The firm's clients, who made their fortunes as entrepreneurs, are families with more than $100 million in assets who have already experienced their first liquidity event, according to Harter. Their business interests range far and wide and they tend to view the larger advisory firms as "mostly utilities." The families "don't fall into the band of traditional asset allocation," Harter explained. He noted that his firm is small enough to be flexible and quick (the firm consists of Harter, his partner and a handful of key staffers), and big enough-through partnerships with Dynasty Financial Partners, a provider of investment and technology platforms for independent financial advisors and custodian Fidelity Institutional Wealth Services-to get the job done.
At Pactolus, the "job" entails traditional and alternative asset management services, hard asset consulting, trusts and estate planning support and philanthropic counseling. A business advisory team is assigned to each client family with the goal of addressing the needs of each family member, Harter said. That includes answering questions such as, "How can I leave a legacy-not just money-that my children will be proud to pass on?" he said.
The firm, which is expecting to add foreign nationals as clients soon, is striving to have a geographically diverse client roster.
"We don't want families just because they have a big check book, but ones who have a global mindset, are willing to include philanthropy as a cornerstone of their portfolios, and who are open to collaborating with other partners-our other clients-leveraging off of each other's collective experience," Harter explained. "Instead of us being in the forefront, we act in the background as a catalyst." Towards this "collaborative" end there is at Pactolus, in addition to a traditional financial board, a "robust and active" client advisory board that has a role in selecting new clients, he said.
All these measures, Harter said, "help create a sense of exclusivity and pride among existing clients, and, quite frankly, to people who would like to join us."
In other news ...
GrantCraft, a resource for grant makers that was launched in 2001 under the auspices of the Ford Foundation, is moving from the Ford Foundation to the Foundation Center in New York and the European Foundation Centre in Brussels to enable GrantCraft to reach professional grantmakers worldwide. The Ford Foundation's decision to award GrantCraft to the two organizations included a $1 million grant. Publications on 30 key issues that grant makers face are available to more than 21,000 GrantCraft subscribers. Go to www.grantcraft.org for further information.
Cogent Research, a market research and strategic consulting firm based in Cambridge, Mass., has released "Institutional Investor Brandscape," a study that investigates emerging trends and attitudes among institutional investors, including corporate pensions, public pensions, Taft-Hartley plans, endowments and foundations. The study also explores the asset manager selection process, with a close look at the role of intermediaries and the importance of having a strong brand in this sector, as well as other factors such as internal decision-making and the use of proprietary and outside research. For further information or to obtain the study, go to www.cogentresearch.com or call 617-441-9944.
Hedge funds were up 10.95% for 2010 after posting positive performance for seven out of 12 months, according to the recently released 2010 Hedge Fund Industry Review from the Dow Jones Credit Suisse Hedge Fund Index. The report noted that on an asset-weighted basis, an estimated 81% of funds have surpassed previous high water marks as of December 31, 2010, and that the industry saw an estimated $8.5 billion in inflows for the fourth quarter, bringing overall inflows to $22.6 billion for the year-representing the largest annual inflows into the space since 2007. According to the report, the largest inflows in 2010 were seen in the Global Macro and Event Driven Sectors, up $16.8 billion and $13.9 billion respectively, while the largest outflows were seen in the Multi-Strategy sector, which lost $16.9 billion. Go to the research section at www.hedgeindex.com for further information.
Hedge funds experienced positive performance in January 2011, with "The Credit Suisse Liquid Alternative Beta Index ("CSLAB") returning 0.18% for the month, according to Jordan Drachman, head of Research for Alternative Beta Strategies at Credit Suisse. Three out of four LAB sector indices posted gains as managers utilized a number of diverse strategies which generated positive returns across both equity and credit markets, he noted, adding that the LAB Merger Arbitrage Liquid Index posted the highest returns in January (+1.66%) after posting returns of 8.04% in 2010. Go to www.credit-suisse.com/alternativebeta for more information.
Russell Investments has launched the Russell Stability Indexes, which are designed to represent certain stock characteristics not taken into account by existing style indexes, and offer benchmark clients another means-a so-called third-dimension of style-of tracking investments other than traditional growth and value indexes, according to the company. The new indexes are created by splitting existing Russell indexes in half based upon specific measurements of volatility and quality. Go to www.russell.com for further information.
Renaissance Administration LLC, an Indianapolis-based charitable-gift design and administration company that specializes in private label administration, has acquired a donor-advised fund platform from Blackbaud Inc., a software vendor headquartered in Charleston, S.C., that serves the non-profit sector. The Blackbaud Donor-Advised Fund program was previously known as Giving Capital and later Kintera Donor Advised Fund before being acquired by Blackbaud in 2008.
The January derivatives volume for CME Group, a large derivatives marketplace, averaged 12.3 million contracts per day, up 10% from January 2010; total volume for January was 246 million contracts, of which a record 85% was traded electronically, according to the company. Go to www.cmegroup.com for more information.
The funded status of the typical U.S. corporate pension plan has risen 3.3 percentage points to 87.6% due to the continuing rally in equities and a hike in interest rates during the month of January, according to recent data from BNY Mellon Asset Management. This is the fifth consecutive month of improvement, boosting the funded status for these pension plans to their best levels since October 2008, according to the company's Pension Summary Report for January 2011.
The Credit Suisse 12th Annual Financial Services Forum is being held at the Mandarin Oriental in Miami February 9-11. Go to www.credit-suisse.com/investment_banking for information.
The 13th Annual BIO CEO & Investor Conference will be held February 14-15 at the Waldorf Astoria Hotel in New York City. The event provides a forum for institutional investors, industry analysts, and senior biotechnology executives to help shape the future investment landscape of the biotech industry. For more information go to http://www.bio.org/bioceo or e-mail firstname.lastname@example.org.
The Deutsche Bank 2011 Small and Mid Cap Conference will be held at The Ritz-Carlton Resort in Naples, Fla., February 15-17. For further information e-mail Annette Noll at email@example.com or go to http://conferences.db.com.
The Sterne Agee Financial Institutions Investor Conference will be held February 16-18 at the Peabody Hotel in Orlando, Fla. Go to www.sterneagee.com for information.
The Capital Roundtable Conference will be held February 17, featuring panel presentations on raising private equity funds from family offices and wealthy individuals. The event will be chaired by Adam Blumenthal, Blue Wolf Capital Management LLC in New York. For registration information call Shaina Mardinly at 212-832-7333, ext. 0, or register online at capitalroundtable.com.
The IFG Wealth Management Forum 2011 will be held at the Ritz-Carlton, Phoenix, AZ, April 11-13. The event provides a platform for investment decision makers from single and multi-family offices to engage in benchmarking sessions and gain practical solutions and best practices. Go to www.ifgwealthmanagement.com for further information.
Denver-based IMCA (Investment Management Consultants Association) will be hosting a series of one-day Best of IMCA Seminars featuring highlights from its certification programs and conferences and created in collaboration with top finance faculty of The Wharton School and leading investment and wealth advisory practitioners. Scheduled are six events in locations across the country and in Canada: April 12 in Toronto; April 27 in Vienna, Va.; and June 1 in Irvine, Calif. Events are also planned for Dallas, Houston and San Francisco, with dates and locations to be determined. Go to www.bestofimca.org for further updates and information.
On The Move
Regal Financial Group LLC, Kentwood, Mich., has promoted Brian Yarch, the company's former executive vice president, to COO. He will be responsible for all Regal's companies, which include Regal Investment Advisors, Regulus Advisors, and Regal Holding Company. Regal Financial and its affiliates-with 100 brokers in 16 states-have approximately $1 billion of assets under management.
Elliot Goodman has been appointed to the board of Investec Trust (Switzerland) SA. With a background in establishing and managing complex estate and tax planning structures, Goodman joined Investec in January 2010 after serving at an independent trust company in Geneva, where he was a director and in-house lawyer responsible for a sizeable client portfolio.
Raymond James Financial Services Inc., Baton Rouge, La., has hired Tom Breaux, a former Morgan Stanley Smith Barney vice president and financial advisor, as a financial advisor and branch manager; and Ian James, a former Wells Fargo branch president, as an advisor. Together, they will operate as Capital Financial Group, an independent firm. Raymond James manages total client assets of approximately $262 billion, of which approximately $33 billion are managed by the firm's asset management subsidiaries.
Capstone Advisory Group LLC, Saddle Brook, N.J., has promoted four managing directors to the position of executive director. They are: Bob Butler and Kip Horton, members of the firm's Restructuring and Transaction Advisory Practice in New Jersey; William Epstein, with the firm's Valuation Practice in Los Angeles; and Steve Wolf, with the Litigation, Forensic and Dispute Resolution Practice in Washington, D.C.
The Chartered Alternative Investment Analyst Association, the sponsoring body of designation for alternative investment expertise, has appointed Andrew Baker, CEO of the Alternative Investment Management Association, to its board of directors. CAIA has also elected CAIA board member Thomas Schneeweis as its new board chair. Schneeweis is the Michael and Cheryl Philipp Professor of Finance at the Isenberg School of Management at the University of Massachusetts, and founding director of the Center for International Securities and Derivatives Markets at the Isenberg School. He fills the position previously held by Florence Lombard, who was named CEO of the CAIA Association effective January 2011.
Northern Trust has bolstered its advisory staff in the Northeast with four new executives: John Lee, a former managing director at Brown Brothers Harriman in New York, will join Northern as a senior vice president and wealth advisor in the New York office; Maria Neary, former head of Geller Family Office Services, as a senior vice president and wealth advisor, also in New York; Brian Donovan, a former senior manager in Ernst & Young's Personal Financial Services Group, as a senior vice president and wealth advisor in the Connecticut office; and Marisa Facciolo, a former vice president and senior private client advisor at Wilmington Trust, as a wealth strategist in Northern's Delaware office.
Old Mutual Asset Management, the US-based international asset management business of Old Mutual plc, has appointed Peter L. Bain as its new president and CEO. Bain was previously senior executive vice president for Legg Mason, where he worked from 2000 to 2009, most recently serving as head of Affiliate Management and Corporate Strategy. He also worked as an M&A banker for Merrill Lynch & Co., and at Berkshire Capital.