A French bank and a U.S. multifamily office enter into "strategic alliance". SG Private Banking (SGPB) , the wealth-management division of Paris-based Société Générale, has taken a 37% stake in New York-based Rockefeller Financial Services, the parent company of multifamily office Rockefeller & Co.

The move gives SGPB opportunities to increase its exposure to ultra-high-net-worth investors, especially in the U.S. Meanwhile Rockefeller & Co. gets access to the French bank's expertise in structured products and alternative investments and, potentially, entrée to markets -- especially in Europe and Asia -- in which it is not now a significant player.

"Our strategic alliance with [SGPB] provides Rockefeller & Co. with access to resources that will broaden and deepen our best-in-class service to our clients, and today's announcement is a first step towards further exciting initiatives for both of our organizations," says Rockefeller & Co.'s president and CEO James McDonald.

The deal calls for McDonald to join SGPB's executive committee and for SGPB's CEO Daniel Truchi and Marc Stern, chairman of Société Générale's North American investment-management division, to join Rockefeller & Co.'s 11-member board.

On the prowl

Precise terms of the transaction weren't disclosed, but overall, the watchword for the tie-in -- now and going forward -- is "partnership" rather than "integration," according to Peter Rockefeller, a managing director of the New York-based investment bank Berkshire Capital and a member of the family that owns most of Rockefeller Financial Services.

"The [Rockefeller] family controls Rockefeller & Co. and will continue to do so," says Peter Rockefeller. "This is not a phased sale."

Rockefeller & Co. is the successor to the John D. Rockefeller Family Office, which was founded in 1882 and became a commercial multifamily office about 100 years later. Though it caters to some institutional clients, its mainstay is providing wealth and investment-management services to families with more than $30 million in investable assets.

It's a rumor of long standing that McDonald had been looking for an overseas partner for Rockefeller Financial Services. The idea was that an alliance with a big institution would help defray expenses to the Rockefeller family, first by means of a more or less immediate payout, and then by giving Rockefeller & Co. an opportunity to add non-U.S. clients, both for its multifamily office and for RockIT Solutions, its high-end data-aggregation and performance-reporting unit -- assuming that keeping RockIT is in Rockefeller & Co.'s game plan.

The thinking had been that Rockefeller & Co. would choose an Asian partner. As it happens Truchi was head of SGPB in Asia for about a decade before he replaced Pierre Mathé in the top slot early in 2007.

Rockefeller & Co. now declines to say how it views its business units' prospects for on-the-ground expansion in non-U.S. markets as a result of its partnership with SGPB.

Points of similarity

Truchi says SGPB's new "relationship" with Rockefeller & Co. stands to "increase [SGPB's] capability to provide a dedicated offering to ultra-high-net-worth clients and family offices worldwide, [which is] a key client segment of our growth strategy."

In that sense, SGPB's move on Rockefeller & Co is another example of a large bank taking a stake in a successful wealth-management boutique to boost its exposure to the ultra-affluent, according to Elizabeth Nesvold, managing partner of New York-based M&A consultancy Silver Lane Advisors -- with the added and vital difference that SGPB is associating itself with one of very best brands in the business.

"This is a big win for [SGPB] because 'Rockefeller' is a world-renowned name that's synonymous with family wealth," says Nesvold.

SGPB "isn't known as a gatekeeper to [ultra-high-net-worth] families," adds Nesvold. Wealthy families tend to use its investment-management and private-banking capabilities "for bits and pieces of their overall financial picture, but [the partnership with Rockefeller & Co.] gives it a chance to elevate the commodity-based relationship."

By the same token, Atlanta-based SunTrust Banks"wasn't truly competitive for the $50-million-and-up market until it acquired [Asset Management Advisors], now called GenSpring," says Nesvold.

Similarly ownership of multifamily offices such as Calibre, Hawthorn, Sterling and Convergent Wealth Advisors have increased exposure to sticky, ultra-high-net-worth assets for Wachovia, PNC, National City and City National respectively.

Again though, Peter Rockefeller stresses that SGPB's involvement with Rockefeller & Co. "isn't an example of integration on the level of a Calibre-Wachovia."

Nesvold also notes that SGPB's tie-in with Rockefeller & Co. makes an up-market complement to its acquisition in January 2008 of CWM Group, a Calgary, Canada-based financial-planning firm that works mainly with low-tier millionaires.

SGPB has about $110 billion in assets under management and staff in 25 countries.

Rockefeller & Co. had $29 billion under administration at the end of March 2008 including $7 billion in assets under management and $5 billion in assets under third-party advisement. In addition to its headquarters in New York, it has offices in Boston and Washington, D.C. -FWR

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