New York wealth advisory gains a foothold in promising local market. High-end registered investment advisory Silvercrest Asset Management Group has just acquired Heritage Financial Management, an investment advisory and family-office service firm based in Charlottesville, Va. The acquisition gives New York-based Silvercrest its first satellite office and increases its assets under management to nearly $6 billion.

Terms of the deal weren’t disclosed.

Martin Jaffe, Silvercrest’s COO and co-founder, says the deal fell into place easily, over a the course of a few months. “We weren’t looking to expand geographically,” he says. “But we came know the people at Heritage, and they just seemed like a good fit with us.” And it didn’t hurt that Silvercrest’s CEO and co-founder Moffet Cochran is a Virginian, he adds. “My partner went to [the University of Virginia], which is right across the street from Heritage.”

Silvercrest’s merger with Heritage might have come about through serendipity, but it ends up looking like smart strategy, according to Elizabeth Nesvold, a managing director of New York-based investment bank Berkshire Capital. “It has all the right elements,” she says. “The Heritage team has developed a scalable [family-office service] offering and, in addition to complementing Silvercrest's investment prowess, the partnership diversifies the client base by geography and is accretive to firm value.”

As an example of a wealth manager adding complementary services through acquisition, Nesvold says the deal recalls Wilmington Trust’s purchase of Los Angeles boutique Grant Tani Barash & Altman and Lydian Wealth Management’s takeovers of Portland, Ore.-based Windermere Investment Associates and Philadelphia-based Copper Beech Advisors. Wilmington, Del.-based Wilmington Trust acquired Grant Tani in part to increase its personal-service offerings, Ron Wood, Wilmington’s executive v.p. for wealth advisory said when the deal was made public in April 2004. When Lydian publicized its two acquistions last June, the Rockville, Md.-based multi-family office said Windermere gave it greater expertise in alternative investing while the addition of Copper Beech made it more of a force in family governance and education.

Formerly executives at Donaldson, Lufkin & Jenrette, Cochran and Jaffe founded Silvercrest in 2002. Prior to its acquisition of Heritage, the firm had about 80 employees, the bulk of them new to the firm through its December 2004 acquisition of hedge-fund manager LongChamp. Under the terms of the latest deal, Heritage’s principals – Russ Bell, Ben Brewster and David Hamar – will become managing directors of Silvercrest. Heritage’s support staff of eight will work for Silvercrest as well.

The Heritage deal adds over $350 million to Silvercrest’s assets under management to bring its total to $5.8 billion, says Jaffe. Silvercrest was the thirteenth-biggest multi-family office in the U.S. with 3.1 billion in client assets at the end of 2003, according to a September 2004 survey published by Bloomberg Wealth Manager magazine. The firm targets individual and families worth at least $25 million. -FWR