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Raymond James Closes Deutsche Bank Private Client Deal
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In a bid to expand in to alternative investments in private equity and hedge funds, Raymond James Financial, Inc. (RJF - Free Report) closed the deal to acquire U.S. Private Client Services unit (“PCS”) of Deutsche Asset & Wealth Management (Deutsche AWM). The deal was announced in Dec 2015.
Deutsche AWM is a corporate division of Deutsche Bank AG (DB - Free Report) . For Deutsche Bank, the deal was part of its ‘Strategy 2020’.
Raymond James rebranded the unit to Alex. Brown, a name that goes back to the unit founded in 1800.
Expansion into Northeast & West Coast, Over 90% Advisors Retained
On closure, Raymond James did not disclose the deal value, though it had earlier stated the purchase price to be $420 million. Nonetheless, the exact transaction value depends on the company’s ability to retain PCS unit advisors.
Raymond James had previously announced that 193 advisors or more than 90% of the PCS unit advisors are joining Alex. Brown. The unit branches are located in 16 places, primarily concentrated in the Northeast and West Coast, with around 600 employees. Further, the unit manages approximately $55 billion in assets.
Raymond James' CEO Paul Reilly said, “This combination continues our focus on strategic additions to augment consistent organic growth while also complementing our core private wealth business in geographic areas targeted for expansion. That such a large percentage of legacy advisors agreed to join Raymond James as part of this agreement speaks highly of our values-oriented culture and the sophistication of our offerings.”
Additionally, Raymond James signed another agreement to provide constant access to advisors to Deutsche Bank’s initial public offer flow, as well as research and other services, for seven years.
Further, Haig Ariyan – Deutsche AWM’s Co-Head of Wealth Management Americas – joined Raymond James as president of the Alex. Brown unit. He will be reporting to Dennis Zank, chief operating officer for Raymond James.
Ariyan said, “We are particularly proud to be taking on the Alex. Brown brand, originally founded as the nation’s first investment bank more than 200 years ago. There is deep affinity among our advisors, who understand Alex. Brown’s important role in the growth and prosperity of American companies and municipalities, and its reputation for serving the needs of ultra-high-net-worth clients and institutional investors.”
Alex. Brown Legacy
Before going in to more details about the acquisition, let us look into the legacy of Alex. Brown. Founded by an Irish immigrant and linen merchant in Baltimore, it was the country’s first investment bank.
Alex. Brown has a fair share of history associated with the U.S. economy. It had financed several infrastructure projects in Baltimore and even aided IPOs of several large companies including Microsoft Corporation (MSFT - Free Report) and Starbucks Corporation (SBUX - Free Report) .
Notably in 1997, Alex. Brown was acquired by Bankers Trust Corp. for $2.5 billion to create BT Alex. Brown. Further in 1999, when Deutsche Bank acquired Bankers Trust, it became part of the German bank. Eventually, Alex. Brown was rebranded under Deutsche Bank’s name.
Hence, the renaming of the unit by Raymond James is a great way of cashing in on Alex. Brown's legacy.
Inorganic Growth Strategy to Expand
This deal offers Raymond James access to alternative investments and sophisticated investment solutions. Also, this will help the company expand its offerings to its existing and future high-net-worth clients.
Further, the deal signifies that Raymond James enjoys a strong liquidity position. The company has been boosting its prospects through strategic acquisitions.
This year, Raymond James acquired Germany-based Mummert & Company Corporate Finance GmbH and announced a deal to buy MacDougall, MacDougall & MacTier Inc. (also known as 3Macs), an independent Canadian investment firm. Last year, the company bought the Canadian asset manager Cougar Global Investments Ltd. and The Producers Choice LLC, a private insurance and annuity-marketing firm.
We expect Raymond James to continue growing through profitable buyouts in the future as well.
Currently, Raymond James holds a Zacks Rank #2 (Buy).
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Raymond James Closes Deutsche Bank Private Client Deal
In a bid to expand in to alternative investments in private equity and hedge funds, Raymond James Financial, Inc. (RJF - Free Report) closed the deal to acquire U.S. Private Client Services unit (“PCS”) of Deutsche Asset & Wealth Management (Deutsche AWM). The deal was announced in Dec 2015.
Deutsche AWM is a corporate division of Deutsche Bank AG (DB - Free Report) . For Deutsche Bank, the deal was part of its ‘Strategy 2020’.
Raymond James rebranded the unit to Alex. Brown, a name that goes back to the unit founded in 1800.
Expansion into Northeast & West Coast, Over 90% Advisors Retained
On closure, Raymond James did not disclose the deal value, though it had earlier stated the purchase price to be $420 million. Nonetheless, the exact transaction value depends on the company’s ability to retain PCS unit advisors.
Raymond James had previously announced that 193 advisors or more than 90% of the PCS unit advisors are joining Alex. Brown. The unit branches are located in 16 places, primarily concentrated in the Northeast and West Coast, with around 600 employees. Further, the unit manages approximately $55 billion in assets.
Raymond James' CEO Paul Reilly said, “This combination continues our focus on strategic additions to augment consistent organic growth while also complementing our core private wealth business in geographic areas targeted for expansion. That such a large percentage of legacy advisors agreed to join Raymond James as part of this agreement speaks highly of our values-oriented culture and the sophistication of our offerings.”
Additionally, Raymond James signed another agreement to provide constant access to advisors to Deutsche Bank’s initial public offer flow, as well as research and other services, for seven years.
Further, Haig Ariyan – Deutsche AWM’s Co-Head of Wealth Management Americas – joined Raymond James as president of the Alex. Brown unit. He will be reporting to Dennis Zank, chief operating officer for Raymond James.
Ariyan said, “We are particularly proud to be taking on the Alex. Brown brand, originally founded as the nation’s first investment bank more than 200 years ago. There is deep affinity among our advisors, who understand Alex. Brown’s important role in the growth and prosperity of American companies and municipalities, and its reputation for serving the needs of ultra-high-net-worth clients and institutional investors.”
Alex. Brown Legacy
Before going in to more details about the acquisition, let us look into the legacy of Alex. Brown. Founded by an Irish immigrant and linen merchant in Baltimore, it was the country’s first investment bank.
Alex. Brown has a fair share of history associated with the U.S. economy. It had financed several infrastructure projects in Baltimore and even aided IPOs of several large companies including Microsoft Corporation (MSFT - Free Report) and Starbucks Corporation (SBUX - Free Report) .
Notably in 1997, Alex. Brown was acquired by Bankers Trust Corp. for $2.5 billion to create BT Alex. Brown. Further in 1999, when Deutsche Bank acquired Bankers Trust, it became part of the German bank. Eventually, Alex. Brown was rebranded under Deutsche Bank’s name.
Hence, the renaming of the unit by Raymond James is a great way of cashing in on Alex. Brown's legacy.
Inorganic Growth Strategy to Expand
This deal offers Raymond James access to alternative investments and sophisticated investment solutions. Also, this will help the company expand its offerings to its existing and future high-net-worth clients.
Further, the deal signifies that Raymond James enjoys a strong liquidity position. The company has been boosting its prospects through strategic acquisitions.
This year, Raymond James acquired Germany-based Mummert & Company Corporate Finance GmbH and announced a deal to buy MacDougall, MacDougall & MacTier Inc. (also known as 3Macs), an independent Canadian investment firm. Last year, the company bought the Canadian asset manager Cougar Global Investments Ltd. and The Producers Choice LLC, a private insurance and annuity-marketing firm.
We expect Raymond James to continue growing through profitable buyouts in the future as well.
Currently, Raymond James holds a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>