Richly rewarding
A recent acquisition means Hancock Whitney is a big player in the Gulf Coast region.
Hancock Whitney recently acquired Capital One’s trust and asset management business, establishing itself as a top 50 wealth management provider across the Gulf South region.
A significant portion of the business Hancock Whitney recently acquired is in South and East Texas. The firm has assets under administration of about $26 billion and assets under management of about $10 billion.
Hancock Whitney’s chief wealth management officer, Miles Milton, recently spoke with the Chronicle about the company’s business and cutting-edge technology.
Q: Could you give us a quick overview of Hancock Whitney’s business?
A:
Hancock Whitney has been around for around 125 years. We have a substantial operation in Houston. The franchise covers five states along the Gulf Coast, Texas, Louisiana, Alabama, Florida, Mississippi, and we have a lending operation in Tennessee as well. We are a very wellestablished bank, and we’re known for our commercial lending. The bank has also been in the trust and asset management business for over 100 years, and that’s continually growing. We got together with Capital One when it announced it was divesting its trust and asset management business and beat out a number of other financial institutions to win the business. It made a lot of sense in the way we conduct business, and 80 percent of this business is in Louisiana and Texas.
We now rank in the top 50 trust and investment managers in the U.S. The merger put us in the position to be a dominant investment management and trust provider from Houston over to Jacksonville.
Q: What is the significance of your acquisition for Houston?
A:
We have over 20 people in Houston, and our chief investment strategist is located in Houston. The strategist gets deep into the quantitative analytics of what our clients are buying and selling — what stocks and bonds to buy — and builds portfolios for people. So Houston became the heart of our investment strategy business.
Q: Does your company invest in Houston?
A:
We have a mutual fund that invests primarily in Gulf South businesses. It’s called Burkenroad, and the fund itself is the No. 1 small cap mutual fund ranked by The Wall Street Journal based on 15-year performance. We only invest in smallcap companies from Houston to Florida, and Houston is a big contributor due to the energy component.
Q: Do you see a lot of new business and building in Houston?
A:
The short answer is yes. In real estate, there was a significant amount of building several years ago, so there’s a lot of inventory that is still on the market and has to be absorbed. It’s healthy, but it’s not a tight market. But people are expanding their businesses and increasing employees. Business is good. I run the wealth management division for the bank, so I see all these things that are happening.
The Capital One acquisition gets us into Beaumont for the first time; we’re going to open a branch there. Capital One had people and assets there, so we’re going into that market, and we have a robust trust and investment management group there and Beaumont has a lot of old money, a lot of oil and gas and rice fields. As a subsection of that, we’re picking up pretty strong minerals management and timber management groups. As younger generations inherit this land, there’s a need for us to help manage the leases and drilling rights, etc.
Q: What does your division do?
A:
First, we spend time planning with the client. We need to understand what they’re trying to accomplish — retirement, kid’s college, donating to charity. That really dictates the most appropriate investments. We look at time horizons, which affects risk levels. Then we sit down with clients and construct investment portfolios. That’s for individuals, but 50 percent of our business is with institutions and foundations. They invest for the long haul.
On the banking side, we offer private banking, lending, mortgages, checking accounts, online banking, insurance planning, estate planning — we look at all these things, particularly with high net worth individuals who have more complex needs. It’s not just investments; we get into pretty complicated estate planning that requires a lot of expertise. We have a team of estate planners, CPAs and attorneys. We have very small cohesive teams that work together.
We are also rolling out technology capabilities that we pioneered. We have a brokerage firm and a trust and asset management firm — both do investments using different operating models. But we put an investment platform over the top of them. Most organizations will run a brokerage firm and a trust and asset management firm, and clients will get different experiences depending on which door they walk into. The client may say the same thing about their goals but get different plans depending on which door. It’s confusing for clients. We wanted to change that and provide similar experiences regardless of which door.
Q: So, you integrated the experience, so the client gets the same results?
A:
Yes, same experience, same investments. This ties things together.
We’re also rolling out a client portal next month. It will allow clients to view all their financial relationships together in one place — e.g., checking accounts, loans, investments, 401(k)s. Then their financial plan also goes on that portal, and they see how their investments are all tracking every day — through the ups and downs of the markets. That’s a pretty unique view.
Planning is long term, but let’s face it, we look at things daily. People want to know how they’re doing when the market gets volatile. People want peace of mind, to know they are OK through the ups and downs.
Q: Does the software flag poorly performing or overly risky investments?
A:
That’s our job. We look at that constantly. We can tell how we’re performing and how much risk we’re taking and the return for that risk. These are mathematical calculations that the industry uses. Our Ph.D. mathematicians build proprietary investment models that review multiple factors and determine when to get in and when to get out. It’s very complex, and it works. The tools make it look simple.
Q: Why is the acquisition of Capital One’s trust and asset management business a big story?
A:
I don’t think people knew how powerful Hancock was to be able to buy Capital One’s business, or just how big the combined entity is. We’re a major investment player.
For Houston, we have a full wealth management team with estate planners, CPAs, certified financial planners, bankers. Our organization has the strength and the capability to compete with the best firms out there, but we still have a very close one-on-one approach with our clients. We’ll sit with you and ask what you are trying to accomplish. We simplify things, invest for the long term, and provide access to all private wealth management services in one place: investing, banking, planning, insurance, commercial lending. Our approach is very holistic, and it makes life simpler for the client.