Magazine article American Banker

Banker to the Superrich Busy Mining His Niche

Magazine article American Banker

Banker to the Superrich Busy Mining His Niche

Article excerpt

DAVID B. HORN wants to steer the super-wealthy away from the vicissitudes of the Dow Jones industrial average.

The highly respected private banker has formed a company, Graystone Partners L.P., to track and broker "alternative" investment strategies that are driven by factors other than the direction of U.S. equity and fixed-income bonds.

Strategies include buying securities of companies in bankruptcy, international investing, and short-selling. Using those strategies diversifies a portfolio by moving some investments away from a direct relationship to U.S. market measures. "This is a business whose time has come," said Mr. Horn, who was the architect of Northern Trust Co.'s Wealth Management Group for the superrich.

The strategies are so hot that Mr. Horn says he has been in-undated with calls from private banks looking to learn more about them and Chicago-based Graystone's services.

Already, he said, many affluent families have about 20% of their portfolios in alternative products. And he believes that slice will reach about 30% for most affluent families within two years.

The intense interest in international investments is fueling growth in all alternative strategies, he said.

"I would think it might represent an opportunity," said David Ross Palmer, a New York-based private banking consultant. "Particularly the segment of the marketplace he's been going after."

After leaving Northern last year, Mr. Horn worked briefly at Bessemer Trust Co. …

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