Milwaukee-based Cedar Street Advisors, a financial planning firm focused on ultra-high net worth clients, has grown significantly since it opened in 2005 with only three employees.
Today, the firm has 12 employees and the company will be adding more people this year. Cedar Street Advisors, which is a subsidiary of M&I Investment Management Corp., has grown in large part because of the rising number of private equity firms buying companies in the area.
Private equity firms have been buying privately held and publicly traded businesses in the Midwest and across the country at a rapid pace in the last three years. The owners of privately-held companies usually realize a windfall of new wealth when their companies are bought up because their net worth that was previously tied up in the business is liquidated.
Executives of publicly traded companies can cash in stock options when their employer is bought up, realizing their own windfalls.
Such windfalls have created opportunities for wealth management firms such as Cedar Street Advisors, which handles the often complex financial affairs of high net-worth individuals and families.
“It’s particularly interesting to me – the amount of cash in the private equity realm,” said Gregg George, director and senior vice president with Cedar Street Advisors. “Even companies with challenges in them are being bought up. The entrepreneur that’s got the mousetrap – that business is attractive to private equity. A significant amount of wealth is being created.”
Cedar Street Advisors serves high net worth clients with employment, estate planning, family advising, investments, business succession planning, taxes and other services, George said.
The firm now manages the assets of 65 high net worth families. Its clients include the owners of privately-held businesses and Fortune 500 chief executive officers.
“You can’t take a cookie-cutter approach,” George said. “You’ve got to adjust accordingly.”
Business owners frequently need help creating succession plans, planning ways to avoid estate taxes and finding the best methods of passing wealth on to family members if an existing business is going to be kept intact. High-level executives frequently need wealth advisors familiar with the Sarbanes-Oxley Act of 2002 and other reporting requirements associated with publicly-held companies.
“We want our clients to think of us as their confidant,” George said. “We want to be there through wealth growth through the next generation.”
Many of the company’s clients are in Wisconsin, but Cedar Street Advisors also has clients as far away as Portland, Ore., and Boston, George said.
While private equity firms have helped create opportunity, Cedar Street Advisors’ growth is largely due to the personal relationships the company creates between its high-credentialed employees and their clients, George said.
“This business is predicated on relationships with our highly credentialed individuals,” he said. “We have four MBAs, and three (with law degrees). To be in front of clients, you need to be a problem solver who knows how to get results.”
Clients are given one advisor at Cedar Street, who handles all relations with that client. That approach creates more trust and an intimate knowledge of the client’s goals and needs, George said.
“Our business model is predicated on a one-on-one basis, based on complexity,” he said. Because Cedar Street Advisors is part of the M&I corporate structure, it is able to draw upon its corporate parent’s resources and other divisions. M&I has its own wealth management division, and Cedar Street Advisors and that division refer clients to each other.
“During the screening process, we look at the different opportunities to make sure (clients) end up in the right situation,” George said. “When there are ongoing issues and a lot of money, those are the ones that end up with Cedar Street.”
