City National to acquire Lydian Wealth Management

Thomas Coyle

28 March 2007

Multifamily office slated to be re-branded as "Convergent Wealth Advisors". Beverly Hills, Calif.-based City National Corporation plans to buy Lydian Wealth Management, the multifamily-office subsidiary of Palm Beach, Fla.-based Lydian. The acquisition stands to increase City National's assets under management to around $35 billion, further diversify holdings of its subsidiary Convergent Capital Management (CCM) and -- given Lydian WM's high-touch, open-architecture approach -- make its overall wealth-management offerings more compelling to ultra-high-net-worth clients.

For Lydian WM, which manages or advises on assets of about $7 billion, the deal provides "a wonderful opportunity to access clients through City National," says Steve Lockshin, CEO of the Rockville, Md.-based wealth-management firm.

The change in ownership also puts Lydian WM under the tutelage of Russell Goldsmith, president and CEO of City National, and CCM's president and CEO Richard Adler. "These are two very successful and mature business people," says Lockshin. "As mentors, I expect to learn a lot from them."

Goldsmith returns the compliment, though in less personal terms. "Lydian Wealth Management has established itself as one of the nation's premier wealth advisors for exceptional entrepreneurs and families with very significant levels of investable assets,'' he says in a press release. "With its outstanding leadership and team of colleagues, proven analytics and systems, strong investment performance and service culture, the company will continue to grow dynamically as a stand-alone business while expanding the wealth management capabilities of City National to fully serve ultra-affluent clients."

New name

Elizabeth Nesvold, a managing director with New York-based investment bank Cambridge International Partners, which co-advised Lydian along with New York-based dealmaker Sandler O'Neill, agrees with Goldsmith's assessment of Lydian WM. "They've got a strong management team," she says. " continues us on a path of seeking out really strong wealth-management and investment-management firms run by strong management teams."

New markets

The deal with City National benefits Lydian, Lydian WM's Florida-based parent, by giving it an infusion of capital -- part of which is expected to go toward building out Fortigent, a high-end, open-architecture investment platform provider that grew out of Lydian WM but isn't part of the deal with City National.

"This is a liquidity event for Fortigent," says Lockshin.

Fortigent itself, like its corporate parent, declined to comment on the City National transaction.

The agreement also exempts Lydian WM's Palm Beach, Fla., office, which will become part of Lydian Bank & Trust.

That leaves City National with Lydian WM's suburban Washington, D.C., headquarters in addition to offices in New York, Philadelphia, Atlanta, Seattle and -- because the acquisition agreement calls for Windermere to be branded as a Convergent Wealth Advisors office -- Portland, Ore.

In other words the addition of Lydian WM gives City National firmer footing in lucrative Eastern Seaboard and in the Pacific Northwest wealth markets. For the moment -- and with the important exception of a branch in New York -- all of its private-client offices are in California.

Within a few months, Lydian -- or more properly Convergent Wealth Advisors -- will open an office in Los Angeles. -FWR