BESSEMER THINKS WASHINGTON AREA IS A CAPITAL PLACE FOR EXPANSION: INTERNET-RELATED WEALTH PUTS GLEAM IN EYE OF NEW YORK COMPANY’S PRIVATE BANKING UNIT

Bessemer Trust Co. is beefing up its private banking operations in the booming Washington, D.C., market.

New York City-based Bessemer, which oversees $17.5 billion of assets for high net-worth investors, recently added two senior private banking executives and a junior-level account manager. The new staff members boost the number of people working out of the 12-year-old office to seven.

Robert Elliott, a senior executive vice president at Bessemer, says the proliferation of Internet-related companies makes Washington and nearby metropolitan areas an attractive market.

“All kinds of wealth is being created in that area,” Mr. Elliott says. “Small Internet companies are fast becoming big Internet companies and we want to be well positioned to serve the needs of the individuals that are benefiting from it.”

About 8% of Bessemer’s more than 900 private-banking clients live in Maryland, the District of Columbia and Virginia, says the banking company.

To gather even more assets, Bessemer hired Thaddeus R. Shelly, formerly director of private client services at Baltimore-based Legg Mason. He joins David G. Curry, who had been in charge of the office on his own since 1986, as joint director.

Bessemer also hired George A. Wilcox to serve as a client service officer and Julie Light as assistant client manager. Both Mr. Wilcox and Ms. Light had worked for Mr. Shelly at Legg Mason prior to joining Bessemer.

At the end of 1996 (the latest year for which data are available), 427,000 households in the Washington area had investable assets of more than $500,000, up 4.4% from a year earlier, according to PSI Global, a Tampa-based research firm.

merger mania helps

Bessemer also sees an opportunity to capture clients who may be left out in the cold by the spate of bank mergers in the area.

BB&T Corp. of North Carolina, for example, revealed plans to buy Maryland Federal Bancorp. in February. A few months earlier, it had picked up Washington-based Franklin Bancorp.

“Mergers create a lot of instability,” Mr. Elliott says. “And private banking clients don’t like instability.”

But Bessemer isn’t the only bank to take notice of opportunities around Washington. Take Winston-Salem, N.C.-based Wachovia Corp., for example.

In announcing its intentions to buy Jefferson Bankshares, headquartered in Charlottesville, Va., last summer, chief executive officer L.M. “Bud” Baker hinted at plans to push further north into Washington’s Virginia suburbs.

Two weeks later, Wachovia snapped up Central Fidelity Banks Inc. of Richmond, the state capital.

Other banks vying to get their hands into the pocketbooks of wealthy Washington area residents include U.S. Trust Corp., J.P. Morgan and Fiduciary Trust Co.

Another is NationsBank, which is also stepping up its private-banking efforts, say experts.

Money is in suburbs

“Nobody is going to get rich catering to wealthy customers living in Washington,” says Darren Parslow, a banking analyst at New York-based Financial Institutions Consulting. “The money is really clustered around the district in places like Annapolis (Md.) and Great Falls (Va.)”

Bessemer also has private banking offices in New York City, Woodbridge, N.J., San Francisco, Los Angeles and Miami, Palm Beach and Naples, Fla. It also has overseas offices in London and the Cayman Islands.

Its Washington office currently manages about $450 million in assets for 35 clients. Mr. Elliott expects those numbers to double in three years.

“This is a very service-oriented business,” says Mr. Elliott. “We’ll continue to add staff as we pick up new clients.”