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Tuesday, July 26, 2016

Why This Bank Is Buying an NYC Fund Firm

Reported by Neil Anderson, Managing Editor

More wealth management industry acquisitions may still be in the cards for People's United Bank, even as it prepares to buy a New York City-based RIA with a mutual fund arm.

Galan Daukus
People's United
Senior Executive Vice President and Head of Wealth Management
On July 21 Jack Barnes, president and CEO of Bridgeport, Connecticut-based People's United, confirmed that People's United subsidiary People's Securities is buying quant shop Gerstein Fisher [profile] in a deal (pricing and terms not disclosed) expected to close in Q4 2016. Galan Daukus, senior executive vice president and head of People's United Wealth Management, offered MFWire more insight into the deal and what People's United is working on next.

Daukus leaves the door open to more acquisitions in the future, including acquisitions or liftouts in the mutual fund space.

"First and foremost, People's United is always looking to hire or lift-out capable and smart professionals, whether they be in the banking side of the business or from the wealth management arena," Daukus tells MFWire in an emailed statement. "We're concentrating on growing our business both organically and inorganically."

As for why People's United is buying Gerstein Fisher, Daukus says that the RIA "has very strong investment capabilities and a terrific record."

"Many of their investment strategies and mutual funds, such as their international real estate strategies, compliment ours nicely," Daukus says. "Their quantitative strategy complements our bottom-up approach of investing."

Gerstein Fisher, founded by Gregg Fisher in 1993, offers financial planning and tax management services, as well as investment management. The 45 people there work with $3 billion in assets, including more than $500 million in a trio of "multi-factor", institutional, no-load, 12b-1-free mutual funds. People's United Wealth Management doesn't currently offer any of its own mutual funds.

"Not only will all professionals be retained, but we plan to engage in growth initiatives that will call for us to invest more in our human capital and staff," Daukus says. "We this is as the launch of a platform that is positioned to handle growth on a few fronts."

Once the deal closes, People's United Wealth Management will have nearly $20 billion in assets under administration, including about $8 billion "under discretionary management."

"Together, we are building a multi-disciplined firm that offers both active and passive solutions," Daukus says. "[Gerstein Fisher] also has a nice set of HNW [high net worth] and institutional clients that we feel, together, can be best served by us together."

"We're also interested in increasing our capabilities in the institutional marketplace and feel that Gregg [Fisher] and his team will allow for that to happen," Daukus adds.

People's United Financial, the publicly-traded parent of People's United Bank, has more than 5,000 employees and more than $40 billion in assets. The bank was founded in 1842 and now has nearly 400 branches across the Northeast. Its tagline is "What know-how can do." 

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