GenSpring acquires TBK Investments and gears up for additional acquisitions. GenSpring Family Offices -- formerly Asset Management Advisors -- has acquired TBK Investments, a Miami-based financial and investment consultancy to wealthy families in Latin America, Spain and Italy. GenSpring says the addition of TBK positions it for growth in the international wealth-management arena.

The merger, GenSpring's first in four years, also presages the start of an acquisition campaign focused on U.S. markets as the SunTrust Banks affiliate attempts to establish itself as a pre-eminent brand in the commercial family-office space.

Latin America

The acquisition of TBK "is a great push into a new geographic region for GenSpring," says Elizabeth Nesvold, managing partner of New York-based M&A advisory Silver Lane Advisors. "Santiago Ulloa" -- TBK's founder and CEO -- "is very well respected in the Latin American wealth-management community," she adds.

Latin America's population of U.S.-dollar millionaires increased 10.2% to around 400,000 in 2006, according to Capgemini's most recent World Wealth Report -- a percentage point or slower than the high-net-worth population growth of sub-Saharan Africa and the Middle East, and a percentage point faster than the population increase of U.S. and Canadian millionaires. Total financial assets held by the region's millionaires increased 23.2% to $5.1 trillion in 2006, making it the world's liveliest region for high-wealth creation.

The scenario for ultra-high-net-worth advisory services in Latin America looks even more promising. Though there were only about 95,000 individuals with $30 million or more in financial assets on the planet in 2006, Latin America had the highest rate -- 2.5% -- of ultra-wealthy individuals as a percentage of total millionaire population.

Several foreign private banks have made headway in Latin America -- Switzerland's UBS and Credit Suisse and Spain's Banco Bilbao Vizcaya come to mind -- but few commercial multifamily offices have taken the plunge.

Family aligned

But GenSpring's CEO Maria Elena Lagomasino says it's been clear for a while "that demand for objective, family-aligned advice and solutions is a growth market not just within the [U.S.], but also on a global basis." TBK has proved "that a firm can build a successful, independent family-aligned business in countries outside" the U.S., she adds.

The deal between GenSpring and TBK calls for TBK to be re-named "GenSpring International" and for Ulloa to lead it as its president. GenSpring doesn't plan make any "material changes" to "TBK's personnel or [to its] handling" of GenSpring's international business.

That's noteworthy because industry sources say that TBK, which advises more than 60 families on around $1.5 billion in assets, relies on third party originators to generate a fair amount of its business. In any event, TBK doesn't have a permanent physical presence in any of the non-U.S. markets it serves.

GenSpring makes a point of staying close to its U.S. clients. Including its headquarters in Palm Beach Gardens, the firm has five offices in Florida -- the others are in Miami, Orlando, Tampa Bay and Sarasota -- as well as branches in Atlanta (where it has two locations) Charlotte, N.C., Washington, D.C., Greenwich, Conn., and New York.

Before TBK, GenSpring hadn't acquired a firm since 2003, when it purchased Eagle Capital International to lay the foundation of its presence in Connecticut. The firm tends to hire teams to open offices in new locations, and until a few years ago, it has tended to stay within Atlanta-based SunTrust's geographic footprint in the southeastern U.S.

Opportunity

But now GenSpring is looking to move more aggressively out of SunTrust's shadow through acquisition with a view to making a national name for itself as an ultra-wealth manager.

This isn't precisely news. Late in 2004, GenSpring's co-founder and chairman emeritus Hap Perry said the firm would be laying the groundwork for just such a move by putting in place a younger leadership team.

In November 2005, Lagomasino, formerly CEO of JPMorgan Private Bank, took the helm, joined by ex-JPMorgan colleagues Michael Holden as COO and Michael Zeuner as chief strategy and innovation officer.

With its leadership fully acclimatized and a new name on the shingle -- GenSpring says it wanted to emphasize its capabilities as a multi-generational wealth advisor rather than as a private-client investment consultant -- the firm says the time has come to start buying wealth-management firms.

In fact, Lagomasino sees no alternative to that. "Hap recognized years ago that this firm is growing like crazy," she says. "To support this growth we are actively looking at potential partners in the U.S."

In a burst of mainly organic growth, GenSpring's assets under advisory have more than doubled to around $12 billion since the end of 2004.

Zeuner says this growth is just a foretaste of what's in store -- predicated on branding and geographic expansion. "We see an opportunity to emerge as the market leader in the family-office space and to have a name that is as recognizable as any in the industry," he says. -FWR

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