Prominent NY family targets region to grow wealth management firm

Here’s a sign the economy in the Sarasota market remains robust: One of the wealthiest families in the New York City banking and real estate scene is relying on the region as a launch pad for a new wealth management company.

The firm, Sarasota Private Trust Co., enters a somewhat crowded field, angling to grab market share among high-net-worth individuals who have multiple choices for where to invest. But Chief Executive John Hart says the firm will utilize a two-pronged weapon to succeed quickly, including surpassing several billion dollars in assets under management within a few years.

One of the new company’s linchpins, says Hart, lies in New York’s Milstein family and third-generation scion and philanthropist Howard Milstein, who together own 51% of Sarasota Private Trust. The Milstein family also owns dozens of commercial and residential properties in New York City; has operated multiple businesses, from bananas to flooring going back decades; and wholly owns Emigrant Bank, the largest privately held, family owned and operated bank in the country, with $5.7 billion in assets. (The family’s real estate holdings, through an entity named Belle Amie Anthem Realty, bought the 11-story BMO Harris Bank building in downtown Sarasota for $23 million in July 2016, property records show; Sarasota Private Trust is based on the fifth floor of the BMO Harris building.)

“The family is very entrepreneurial,” says Hart. “When there isn’t a better mousetrap, and they can’t find it, they build it themselves.”

The second linchpin that separates the firm from others, contends Hart, and an example of a better mousetrap, is its co-investing model — or what the firm calls “private banking at its most exclusive level.” For clients, co-investing at Sarasota Private Trust means access to rare investment opportunities without a hedge fund’s layers of fees, Hart says. The firm generally waives the standard hedge fund 2% management fee, and only charges a performance fee after the client surpasses a threshold rate of return. “Co-investing is our most distinctive aptitude,” Hart says.

“We don’t just have skin in the game,” adds Hart, noting the Milstein family’s co-investing model dates back to 2004, when it founded New York Private Bank & Trust. “We have our whole body in the game, and we think that really resonates with clients.”

"We don’t just have skin in the game. We have our whole body in the game, and we think that really resonates with clients." John Hart, Sarasota Private Trust Co.

Essentially, Sarasota Private Trust matches a high-net-worth investor with the Milstein family’s connections, expertise and stellar track record. The family has invested in everything from a Jack Nicklaus-connected golf course design firm to a bottling company. One investment, according to the firm’s website, involves a computer service company, Intechra. The Milsteins bought 60% ownership in Intechra for $9 million, then sold it after 18 months for more than $110 million.   

“Howard Milstein has the idea, where if you can build this model in New York, then you can duplicate it in a local market,” Hart says. “Sarasota is a great growth market for this.”

One more defining feature of the firm’s setup is its commitment to minority ownership stakes from prominent area families. The list of Sarasota Private Trust co-owners includes former FDIC Chairman Bill Isaac and his wife, Christine; Ned Davis Research founder Ned Davis and his wife, Mickey; and Dr. Dean Hautamaki and his wife, Lizzie.  

While Hart builds up the Sarasota office, he’s also looking at possible expansions, both in the Naples area and on the east coast of Florida. The company already has one person working in business development in Bonita Springs, to begin targeting Southwest Florida.

The biggest challenge? To get the word out that Sarasota Private Trust is here and has a different model. Hart says word-of-mouth of the firm’s past successes, at first, is the best way to build a client base.  

“People can get bad service and they can get bad returns, and many times they still don’t take the time to change (money management firms.) The business is relatively sticky that way,” Hart says. “In order for us to prove our worth we have to create a sense of what they can get from us that they didn’t get from the other company. That will take some work for us. And time.”