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Technology > Investment Platforms > Turnkey Asset Management

Raymond James to buy Deutsche Bank U.S. private client unit

By Donal Griffin, Katherine Chiglinsky

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(Bloomberg) — Raymond James Financial Inc. agreed to buy Deutsche Bank AG’s U.S. private-client services unit, adding offices in the Northeast and mid-Atlantic region.

Haig Ariyan, co-head of wealth management in the Americas for Deutsche Asset & Wealth Management, will join St. Petersburg, Florida-based Raymond James along with other executives as part of the deal, according to a statement Thursday from the U.S. firm. The sale doesn’t include Frankfurt- based Deutsche Bank’s U.S. private bank, which handles some of its wealthiest clients.

Raymond James Chief Executive Officer Paul Reilly has been boosting the firm’s growth through acquisitions. This year, he agreed to buy the Canadian asset manager Cougar Global Investments Ltd. and the Producers Choice LLC, a private insurance and annuity marketing company. Raymond James expects to invest about 1.4 times revenue in the Deutsche Bank deal, and the total investment may be adjusted based on the company’s ability to retain advisers, it said in a web presentation.

“The agreement significantly accelerates our expansion,” Reilly said in a conference call about the deal, which is expected to be completed in the third quarter of 2016. “We’re very focused on growing in the Northeast and the West and the positioning in the Northeast and mid-Atlantic, some of the wealthiest markets of the country, really provide a strong foundation.”

Scaling Back

Deutsche Bank Co-CEO John Cryan, who replaced Anshu Jain this year, has been trying to lower costs and improve the company’s return on equity. The firm said in October that Michele Faissola, its head of asset and wealth management, will leave the company after a transition period. The bank is also splitting the asset and wealth management business into two separate units.

“This agreement will allow us to focus on our strategic priorities including investing in our U.S. private bank,” Fabrizio Campelli, Deutsche Bank’s global head of wealth management, said in the statement. “The U.S. is a key geographic region for Deutsche Bank’s wealth management business.”

The U.S. private-client business, once part of Alex. Brown, was acquired by Deutsche Bank in its purchase of Bankers Trust Corp. in 1999. The $9 billion deal was a record at the time for a foreign purchase of a U.S. investment bank. The unit has about 200 advisers with about $50 billion of client assets and $300 million of revenue, according to the presentation.

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