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August 25, 2012 at 07:00 AM
One hundred firms make up AdvisorOne’s 2012 Top Wealth Managers, as measured by assets under management per client, with data as of 12/31/11.
Here we present a profile of the crème de la crème of the Top Wealth Managers—those 10 firms thattopped the list in in our 2012 survey.
View the list of all 280 firms in our 2012 Top Wealth Managers survey.
Silvercrest Asset Management Group, based in New York, was founded in 2002 by a group of portfolio managers formerly from DLJ Asset Management, which had been acquired by Credit Suisse. The firm is celebrating its 10th anniversary this year. According to Richard Hough, president, Silvercrest was founded “to create an independent employee-owned firm free of the conflicts of interest that existed at financial conglomerates” and to serve ultra-high-net-worth clients with the “personalized and customized service like old private banks”—and with very good investment performance.
The firm is 76% owned by employees and 24% by Vulcan Capital, an investment vehicle for Paul Allen, cofounder of Microsoft. Made up currently of 33 principals and a total of 85 staff members over all, some who joined the firm through the acquisition of four other firms but most thanks to organic growth, Silvercrest has grown by more than $1 billion a year since its inception.
Crisis Made Firm “Stronger”
While the financial crisis may have begun in 2008, Hough says, it didn’t begin to hit many companies’ financial situations until 2009. However, Silvercrest “remained profitable,” although profits were lower because of the toll the crisis took on the firm’s assets under management and, by extension, the fees Silvercrist charged. And despite the crisis, clients stayed. “We have an average annual client retention rate of 98% over the past five years,” says Hough, and adds that now, organic growth is “as strong as ever, if not stronger.”
During the crisis, Hough (left) says, the firm did not change its approach to client funds. “In fact, we stuck to our view of the role of asset allocation in client portfolios and maintained a long-term view,” he says, explaining that in the spring of 2009, with equities substantially lower in value, “we were attempting to allocate more client money into equities because we thought they were discounted at that point.”
What the firm did do to cope with the crisis, Hough says, was to “create as much efficiency as possible in our operations and technology.” Still, he adds that the “key was very carefully managing our cash flow.”
It may have been key, but neither it nor the changes to operations and technology were major adjustments, Hough says. “These were tweaks. The business was operating very well going into the crisis and came out stronger on the other side.” As the company grew out of the crisis, he adds, its profit margin grew too.
Distinguishing Characteristics
