Ex-U.S. Trust CEO Maurer
founds old-line boutique

November 20, 2008

NEW YORK — New York-based investment bank and asset manager Evercore Partners has launched a wealth-management unit. Jeffrey Maurer, a former head of U.S. Trust, leads a team of portfolio managers and wealth planners culled from the ranks of Bank of America's Private Wealth Management (PWM) group.

Evercore's aim to provide independent, high-touch advice and services to private clients with more than $5 million in investable assets, accords with its approach to investment banking and institutional asset management, according to the firm.

"And," says Evercore's CEO Roger Altman, establishing a wealth-management unit "moves us further toward our long stated strategic goal of better balancing the firm between its advising and investing activities."

Evercore Wealth Management (EWM) started with Maurer's search for a strong and culturally compatible home for a new fiduciary wealth-management firm. "I was looking for seasoned, skilled professionals who are very client-focused," he says.

Old fashioned

Twelve-year-old Evercore fit the bill because "it's a focused boutique with a very experienced management team and [it's] without conflicts of interest," says Maurer. "They don't sell or trade or underwrite anything; there's no lending, there's no research -- they sell nothing but advice."

Maurer joined Evercore about five months ago to lay the groundwork for EWM. In 2003, he joined Lehman Brothers as chairman and CEO of the now-defunct investment bank's trust company; a position he held until late in 2007. Before that, he spent 33 years at U.S. Trust, going from assistant trust officer to president, then COO, and finally -- from early 2001 through early 2003 -- CEO.

San Francisco-based Schwab acquired U.S. Trust, till then an independent trust company, in 2000. Charlotte, N.C.-based Bank of America bought U.S. Trust from Schwab in 2007. Bank of America promptly folded it into its PWM group along with the Private Bank of Bank of America and its Family Wealth Advisors multifamily office -- save, that is, for certain bits of U.S. Trust's proprietary asset-management division that wound up in the bank's investment group Columbia Management.

EWM is meant to be "an old-fashioned investment counseling firm" that provides a blend of in-house and third-party investment management, financial and estate planning and -- once it secures the OK to establish a national special-purpose trust company -- trust and custody services, according to Maurer.

Hands on

Working with Maurer to formulate strategy for EWM is his long-time associate Fred Taylor, a former CIO of U.S Trust. In addition he is joined by former U.S. Trust portfolio managers (via Columbia Management) Gary Gildersleeve, James Holihan, Sandy Panetta and John McDermott, former U.S. Trust chief trader John Rendinaro and former U.S. Trust advisor Karen Francois.

Though he says that more professional staff is on the way, Maurer declines to comment on reports that Chris Zander, head of U.S. Trust's ultra high-net-worth team, Jay Springer, investment-management executive for U.S. Trust's mid-Atlantic region and John Apruzzese, head of customized equity management at U.S. Trust, are among them. Zander left Bank of America earlier this week, according to several of his former colleagues there.

Though all the wealth-management professionals whose hires EWM has so far confirmed have worked with Maurer and Taylor at U.S. Trust, tenure with that firm isn't a requirement for employment with the start-up.

"We're interested in others who want to join a firm with characteristics like this one," says Maurer. "There are lots of professional, client-centric stock brokers who manage portfolios; they have the potential to do very well with us, and we'd like to talk to them."

The predominance of hands-on portfolio managers at EWM is a core characteristic of the firm. "The portfolio manager is best suited to deal with investment policy and asset allocation and the overall investment fit with the client," says Maurer.

Some firms, which may have started as old-line capital-management or investment-counseling boutiques, lose sight of the value of putting portfolio managers as the client's disposal -- especially when they become units of much larger companies, according to Maurer. "Over time, portfolio managers start running products and stop talking to clients."

Calling card

EWM intends to keep its investment offerings as simple and as transparent as possible. It augments in-house global equity, fixed-income and cash offerings with a selection of outside managers and passive strategies.

It also uses alternative managers, but -- in view of recent turmoil in this realm -- with strict limits. "We want to see exactly what happened with them in this period, how they perform over time," says Maurer. "Our view of alternatives goes to something Fred Taylor has said: 'If you don't understand it and you can't explain it and it's not transparent then you shouldn't be in it.'"

Performance data for the global hedge-fund industry is notoriously difficult to find. The general sense is that these loosely regulated, opaque and illiquid portfolios have outperformed anemic traditional-asset markets in recent months, but with enough in the way of jaw-dropping blowouts to make them as worrisome, at least, as anything out there.

EWM's stance on alternatives is "clearly a reaction" to the on-going financial crisis, says Maurer -- but only in part. More broadly it's in keeping with its traditionalist approach to private-wealth management.

"It's sort of like 'Back to the Future," says Maurer. "In these difficult times having someone you can rely on not to have conflicts of any kind is a good calling card." -FWR

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