In a move that looks set to boost its Asian private banking business, Fortis has acquired Dryden Wealth Management for $104 million. The investment management firm, which has $11 billion under management, was purchased from Prudential of the US.
Dryden, which is 50 years old, operates in four European countries as well as Hong Kong, Singapore and Taiwan. "This acquisition fits exactly with our focus on the Asian markets," says Rob ten Heggeler, Chief Executive of MeesPierson, Fortis Bank's private banking arm.
"We have been very bullish on Asia for the past few years and grew organically in Asia by 25% last year. The acquisition of Dryden will more than double our business here," adds ten Heggeler.
Dryden manages $3.5 billion of clients assets in Asia, which added to Meespierson's $2.5 billion brings the total up to $6 billion. "We were looking to double our staff in Asia this year, so this acquisition fits with our strategy and is quicker than hiring," he says. For example, Meespierson currently has 40 staff in Hong Kong, and Dryden has 150. Dryden also has 45 staff in Singapore as well as people on the ground in Taipei, where ten Heggeler says Dryden is very active.
Prudential announced its intention to sell Dryden in January and what surprised Fortis was how well the client bases fitted together. There was very little overlap, and meanwhile the entrepreneurial profile of the client base was very similar to the market Meespierson had been focused on. The typical client has at least $1 million of investable assets, and a net worth of $3 million.
Dryden had fostered loyalty and long term relationships among its clients - of which there are over 4,000 in Asia - and even when it was announced it would be sold, ten Heggler says the firm didn't lose clients, and in fact added new ones.
"Many of Dryden's staff here in Asia have been with the firm for more than 10 years, which is quite exceptional in this market," notes ten Heggeler of the business's stability.
Dryden speciality is on the investment side as well as in active brokerage, which nicely complements Meespierson's own strengths in trusts, wealth structuring, philanthropy, real estate and lending. In Asia Dryden has focused particularly on fee-based discretionary investment mandates, and ten Heggeler says that Dryden's competency on the investment side will greatly boost Meespierson's franchise. There will also be a great deal of scope for cross-selling between the client bases.
Among the products that has been acquired in the deal is Dryden's Managed Assets Programme. This product gives clients direct access to global best-in-class fund managers that normally only institutions can access. Dryden also brings greater expertise in commodity investing and on the derivatives side.
Fortis paid about 1% of assets under management to acquire Dryden. In January next year the whole business - both Meespierson and Dryden - will be rebranded as Fortis Private Bank. "I am very excited," says ten Heggeler. "Our Asian clients have expressed a great preference for the use of the unified Fortis brand."