Boston Private Financial Holdings, a leading acquirer of wealth management, investment management and private banking firms, sold two firms back to their managements Tuesday.

Sand Hill Advisors, a wealth management firm in Palo Alto, Calif., repurchased the stake Boston Private had purchased years ago, with financing supplied by Dallas-based Fiduciary Network. Boston Private Value Investors, a Concord, N.H.-based investment firm that Boston Private had acquired in 2001, was also sold back to management and renamed BPVI.

Catherine Sheehan, senior vice president of corporate communications at Boston Private, says the two transactions did not represent the initiation of a major divestment program at the big holding company. Both Sand Hill Advisors and BPVI were sold because of "situations of overlap," she explains.

Over the years, Boston Private has acquired some of the leading names in the wealth management business, firms that collectively managed more than $20 billion at one point in the last few years. Some of the firms include Coldstream in Bellevue, Wash., and Portland, Ore., and Bingham, Osborne and Scarborough in San Francisco.

"Sand Hill evolved from an investment management firm into a wealth management" business over time, Sheehan says. That placed it in a position where it overlapped with Bingham Osborne.

In 2008, Boston Private suffered major loan losses at one of its banking subsidiaries, Gibraltor. To replenish its capital base, the firm raised $75 million from the Carlyle Group, the giant private equity firm, and another $110 million in a public offering last September.
There are "no plans to sell other assets," Sheehan says. However, she quickly adds that "at the current time, we don't have acquisitions on the radar screen."

Since the credit crisis worsened in September, acquisition activity of advisory businesses, as in many other industries, has slowed markedly. Among the major acquirers, only Fiduciary Network, which has done five deals in the last six months, has completed transactions of any significance.

But Fiduciary Network isn't a traditional acquirer, since it opts to purchase only minority stakes of 10% to 30% and tries to help firms finance transitions from one generation to the next. In contrast, acquirers like Focus Financial and Boston Private acquire much larger stakes, often reaching up to 50% or 70% in some cases.