Magazine article American Banker

Bernstein, Alliance to Vie for Wealthy

Magazine article American Banker

Bernstein, Alliance to Vie for Wealthy

Article excerpt

Alliance Capital Management Holding's deal to buy the investment management firm Sanford C. Bernstein is another signal that banks will have to fight hard to maintain position in managing assets for the wealthy. The $3.5 billion cash and stock deal, announced Tuesday, would combine the high-net-worth management experience of Sanford Bernstein and the product diversity and national reach of Alliance to create a formidable competitor. The deal is an "invasion of turf," said Barton Greenwald, a consultant in Philadelphia. Once the only game in town in the wealth management business, banks have been steadily losing market share to investment managers and mutual funds. Now more rich people place their assets with money managers than with banks, Mr. Greenwald said. Though banks still control a substantial share of these investors' assets, "whether they'll retain their strong position is open to question." Axa Financial -- which owns a 60% stake in Alliance -- is looking to move into the high-net-worth category, which is "the fastest-growing segment of the money management business," said Ed Miller, president and chief executive officer of the French insurer. The wide range of Alliance's products -- including insurance, annuities and other investments -- would make the combined outfit especially appealing to the wealthy, said Lewis Sanders, chairman of Sanford Bernstein. Joe Hershberger, managing director at Putnam Lovell Securities in New York, noted the companies' complementary strengths: Alliance's equity growth funds and Sanford Bernstein's value funds. …

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