Pitcairn, the Jenkintown, Pa.-based multifamily office, which has approximately $2.8 billion in assets under management, will open up a New York office in February.

Pitcairn’s expansion into Manhattan will be led by William Rankin and Alanson Houghton, the chief executive and chief investment officers, respectively, of Shelterwood Financial Services, whose practice will be merged into Pitcairn’s next year.

“We’re starting with an experienced and well-respected team,” said Leslie Voth, president and chief operating officer of Pitcairn. “It’s not a de novo situation and that was very appealing to us. We already have clients in the New York area, so it will be nice to have an office there, and expanding our footprint into New York will bring additional growth opportunities.”

Pitcairn’s move is the latest in a strong of wealth management firms who are either expanding into New York or building up their business in the lucrative but highly competitive market. (For a recent feature on this issue, click here).

Earlier this fall, Glenmede, a Pitcairn rival also based in Philadelphia, opened up its own office in Manhattan.

Mr Rankin argued that Pitcairn’s approach was the best of both worlds.

“It’s an ideal way to do business here,” he said. “New York is a very expensive place to do business and very labor intensive. By opening a smaller office with senior, experienced players already in place but supported by a back office outside of New York you have a situation that’s less costly and more stable.”

Mixed Reaction To Move

Industry reaction to the announcement was mixed. Some observers praised the move, saying that a New York presence would give Pitcairn increased visibility and prestige.

But others noted that absorbing the cost of Shelterwood’s top executives’ salaries and Manhattan real estate may have come at a high price considering that Shelterwood only has about $200 million in assets under management and advisement.

Shelterwood’s days as a multifamily office were numbered since earlier this year, when the private company owned by the firm’s founding family, The J M Huber Corporation, decided to focus its resources on the Huber’s single family office.

“What happened is part of an ongoing industry trend of consolidation of family offices,” said Steven Wade, a partner at Knightsbridge Advisors, Inc. a New York-based executive search and consulting firm. “Times are tough, and not every family office can operate as a stand alone. Some will have to share expenses to reduce overhead and survive.”

Ms Voth agreed, and said the Shelterwood pick-up may not be Pitcairn’s last.

“We’re very well positioned and will continue to take a thoughtful approach to growth,” she said. “If we see other opportunities that can strengthen our business, we want to take advantage of it. But it has to be the right fit of culture and philosophy. We’re not going to become a roll-up firm.”

In addition to its suburban Philadelphia headquarters, Pitcairn also has an office in Washington, DC.