Bank firm in Penna. to buy adviser Stratton

Susquehanna Bancshares Inc. is buying Stratton Management Co., a Plymouth Meeting money manager founded in 1972.

The deal is one of at least eight in recent months involving Philadelphia-area asset managers and advisers.

Industry observers said that, in many cases, company founders are looking to take some money out of their businesses. At the same time, the spate of sales follows several years of robust markets and strong valuations for asset managers.

"It sure looks like a good time to try to get liquidity," said John C. Siciliano, managing partner at Grail Partners L.L.C., a New York merchant bank for investment managers.

Susquehanna, a bank holding company in Lititz, Pa., did not say what it will pay for Stratton, which has $3 billion in assets under management. If the deal closes as expected in the second quarter, it will boost Susquehanna Wealth Management's assets 50 percent to $9 billion.

James A. Beers, president of Stratton, said the company was looking for a buyer that would allow it to continue operating independently. Beers, founder James W. Stratton, and company chairman John A. Affleck are expected to remain with Stratton after the sale.

Buyers of asset managers are attracted by the fee income, said Burton Greenwald, a Philadelphia mutual fund consultant.

Susquehanna, for example, is trying to boost its fee-based income from 35 percent of revenue to 40 percent, said Drew Hostetter, the bank's chief financial officer. Asset management is a good way to do that - without adding many people to the payroll - because the bank gets paid a percentage fee whether the market goes up or down, he said.

When Susquehanna bought Valley Forge Asset Management Corp., of King of Prussia, in 2000, the company had 25 employees and $800 million under management, Hostetter said. Now it manages $3 billion with just two more employees.

Stratton is Susquehanna's second recent deal. It bought Widmann, Siff & Co. Inc., of Radnor, in August.

Other recent local deals involved Davidson Capital Management, of Devon; Cooke & Bieler Inc., Philadelphia; Carnegie Wealth Management, of Exton; Axiom Asset Management L.L.C., of Radnor; myCIO Wealth Partners, of Philadelphia; and Nationwide Financial Services Inc.'s active-asset-management arm in West Conshohocken.