This news service spoke to the top men at the wealth management firms Stanhope Capital and FWM about the reasons for driving their merger, and how they think the business landscape stacks up.

Stanhope Capital’s merger with FWM, creating a business with more than $24 billion in assets, operates in the middle ground vacated by conflicted banking groups and a mass of sub-scale players, one of the merged entity’s top figures says.

Last week FWM Holdings, the owners of Forbes Family Trust and other US investment groups, merged with European investment house and merchant banking group Stanhope Capital. The merger is subject to customary closing conditions and is expected to close in the first quarter of 2021. The management of FWM will receive Stanhope Capital shares as part of the consideration. Other financial terms were not disclosed. Besides Forbes Family Trust, FWM Holdings owns LGL Partners and Optima Fund Management. Founded in 2009 by Keith Bloomfield, FWM oversees $11.2 billion for ultra-high net worth family offices and individuals, foundations and endowments located primarily in the US from offices in New York City, Philadelphia and Palm Beach.

Stanhope is the larger of the two entities in AuM terms - $13 billion – and was founded in 2004 by Daniel Pinto. It serves private clients, endowments and charities and employs 85 people, with offices in London, Geneva and Paris.

Creating such a transatlantic business fills an important gap, Pinto told WealthBriefing in a recent call. Pinto discussed how the current wealth management landscape is bifurcated between large banks that are “conflicted”, he said, because of their need to put products in front of clients and under pressure to get results, and hundreds of small, sub-scale advisors that don’t have the capacity to handle their clients' needs. There is, therefore, ample room in the centre ground.

“Nirvana is in the middle…..the scale of a large institution but where conflicts of interest are avoided. We have scale to do the research on any asset class in all parts of the world,” he said. 

For his part, Bloomfield, who also spoke to this publication, said that the transaction will “greatly expand our investment capability in both directions.”

The investment team has more than doubled in size since the merger, he noted. 

“For US clients, they can have more access to niche and other opportunities in Europe and the Middle East,” he continued. 

Stanhope clients’ portfolios already have exposure to the US and they can now access the FWM team, with its skills in areas such as hedge funds, venture capital, private equity, etc). “The merger is a win-win for clients.” 

The deal is an example of M&A activity affecting multi-family offices and similar structures. In September UK-listed Schroders acquired Sandaire, the London-based multi-family office. In 2018, Caledonia Investments, owned by the UK’s Cayzer family, bought a significant minority stake in Stonehage Fleming, another MFO.

MFOs such as Sandaire, Pitcairn and others have sought to enhance their investment and organisational firepower by exchanging ideas through networks such as the Wigmore Association.