Northern looks to reinforce single-office markets

Thomas Coyle

1 July 2008

Cleveland merger may set the stage for acquisitions in other U.S. cities. In its first acquisition in five years, Northern Trust is set to buy Lakepoint Investment Partners, a Cleveland, Ohio-based asset manager to high-net-worth investors. The deal stands to double the Chicago-based trust company's presence in northeastern Ohio and serve as a model for selective buys in U.S. markets.

The deal, which is expected to close later this summer, came out of a cold call from Northern Trust to Lakepoint's co-owners Mary Ann Laughlin and Douglas Wang about a year ago. "That resulted in a meeting with someone from Northern Trust we'd never met before, and it just went from there," says Laughlin.

Critical mass

Though Northern Trust sees organic expansion as its primary engine of growth in wealth management, Sherry Barrat, co-president of Northern Trust's Personal Financial Services (PFS) division says "it's highly possible that that we could undertake one or more footprint," says Ketner.

More to offer

And deepening that footprint is precisely why Northern Trust is buying Lakepoint. Although the all-propriety manager's large-capitalization growth equity and investment-grade fixed income offerings make a welcome addition to Northern Trust's in-house platform, acquiring Lakepoint is mainly an opportunity for Northern provide more services to its client base, according to Barratt.

Michael Cogan, president of Northern Trust's operations in Ohio, agrees. "Our partnership will provide expanded investment resources to Lakepoint's clients and allow them to take advantage of Northern Trust's banking services and trust capabilities," he says.

Lakepoint manages $586 million across about 200 relationships ranging in size from "many millions to under half a million," says Laughlin. Its private-client base is a mix of new-wealth creators and legacy-wealth holders for whom, in many cases, Lakepoint is their sole investment manager.

Right now, Lakepoint clients turn to a variety of providers for banking services including regional leaders like National City and KeyBank.

Through PFS, Northern Trust provides private- and business-banking, investment-management, trust, financial-planning, philanthropic, retirement-planning and brokerage services to clients with at least $1 million in investable assets.

PFS' Private Client group targets those with between $1 million and $5 million. Wealth Advisory is for clients with between $5 million and $200 million. At the high end of the Wealth Advisory spectrum, PFS offers outsourced family-office services through Family Advisory. And PFS' Wealth Management group provides support services to single-family offices with at least $200 million in assets.

So for Lakepoint, the tie-in with Northern Trust "strengthens what we can offer," says Laughlin. "It gives us the ability to provide our clients a broader array of services."

When the deal with Northern Trust is completed, Laughlin, Wang, portfolio managers Joseph Thomas and Michael Wagner and the rest of Lakepoint's professional and support staff will join Northern Trust, moving into PFS' existing office about two blocks from Lakepoint's present location.

The Lakepoint brand will disappear.

Northern Trust PFS managed $146 billion at the end of March 2008. -FWR

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