Former Bear Exec Named CEO Of Modern Bank

Lane's new role as chief executive is effective on July 1.

June 24, 2008

Modern Bank, a private bank that caters to high net-worth clients, said Tuesday it hired the former chairman and chief executive of Bear Stearns' asset management group, Jeffrey Lane, as its new chief executive.
 
Opened in 2006, Modern Bank is the first independent, private client bank to be licensed by the Office of the Comptroller of the Currency in 25 years. It has more than $500 million in banking assets and $200 million in assets under management.

Lane's new role as chief executive is effective on July 1.

Jeffrey Lane Lane, whose career on Wall Street includes work as vice chairman of Lehman Brothers, chairman of Neuberger Berman and vice chairman of Travelers Group, was introduced to senior managers at Modern Bank by a friend who happened to be a client of Modern Bank. Asked about his plans for the bank, Lane said "we want to build on both platforms [asset management and banking] because they feed off of each other. There is a whole lot of synergy between a high net-worth banking business and the asset management business. We will try to grow both and obviously I have some interesting ideas on acquisitions and add ons."
 
Investment bankers specializing in financial institutions have noted that, in recent months, some financial giants have been looking to sell money management businesses as part of an effort to buttress their balance sheets. Asked about some of these business units being placed up for sale, Lane acknowledged that this "could present an opportunity for us."
 
Lane added that "we are going to be very opportunistic about the opportunities that present themselves. We have a good solid platform, no historic problems and understand the business."
 
Asked if the sales by finance giants of asset management units - typically a good source of steady income - may not be short-sighted, Lane touted "the asset management business [as] one of the best businesses in the world. It is not capital intensive. If you do a good job for your clients, they recommend you to their friends. There's nothing much better. However you can't run the business as a hobby. So, unless you are really serious about it, you are probably better off not being in the business."
 
Modern Bank is backed in part by Raycliff Capital, a private equity firm based in New York that invests in financial services, real estate and information technology. Bippy Siegal, chairman and founder of Modern Bank, said in a prepared statement that "Lane is a proven and respected leader with nearly 40 years of experience at a number of Wall Street’s top financial institutions. He will play a central role in further developing and executing our strategic growth plan."
 
Asked what he would recommend to his investor clients for today's volatile market conditions, Lane says he has always focused on "vanilla" investments. As he puts it, "one of the mantras that I have followed through my career is that if it is not a product that I easily understand, I'm not going to recommend it to anyone. Wealthy clients are wealthy already. They don't come to us to be made wealthy. They come to us for piece of mind. If you remember your fiduciary responsibilities, I think you can end up owning the world."
 
So what investments are good for these tough markets? The answer obviously hinges on each client's needs, but Lane notes that, "Diversification has always been important and none of that has really changed. Completely understand the products that you are buying. It is also important that you understand the needs of individual clients. There is not one answer for all clients. You can't go to a wealthy client and convince them that everything you have internally is the best. That's just not realistic."

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