A single family office’s relationship with its former bank began to falter during the financial crisis of 2007-2008. The decision makers for this six-generation family office were in the third and fourth generations. The family’s investment partnership had a long history of successfully investing in marketable securities, hedge funds and private equity investments, but the financial crisis struck just as the office’s regional bank was being acquired by a national bank. The Catalyst: With the sale of their relationship bank and the stress on large banks in the marketplace, the family office director was concerned that the large bank might decline a loan renewal in the future—a fear that eventually came to fruition.
Assessing the Fit
The director was referred to TriState Capital by a mutual relationship, so a sense of trust and comfort was present from the beginning. The family office was drawn to our bank’s innovation and flexibility, and our financial markets and services acumen was a clear advantage.
After reviewing the firm’s strategies and past performance, we determined that the situation was within our area of expertise. We proposed to provide the credit facility that the family office needed to return to its pre-crisis investment plan.
Plan Development and Implementation
Many possibilities had to be considered. We originally set up a single line of credit with a floating rate. Then, the firm requested the ability to draw a portion of the loan all at once at a fixed rate, for a fixed term. We engineered a custom solution: a fixed-rate tranche according to the particular investment being made, without the complications of the swaps market.
The TriState Capital Advantage
This family office wanted to do business with a “partner” bank, not a transactional bank—and TriState Capital was the right relationship at the right time. Flexibility was the client’s key concern, and also our greatest advantage.
The entire process took just 35 days to complete, thanks to TriState Capital’s proprietary systems that allowed for a speedy review and approval.
Solutions and Results
The family office has used the line—fully funded at one point—to take advantage of new business opportunities offering a good return. Access to the credit facility has allowed the firm to continue its investment strategy and has proven to be an important factor in its financial success.
As a result of this successful work, what began as a lending relationship quickly grew to include deposits—and we expect the relationship to continue growing.