Evolve Overtakes Simmons in Trust Assets

Evolve Overtakes Simmons in Trust Assets
(Evolve Bank & Trust)

Stephens Inc. of Little Rock remains firmly atop the annual lists of Arkansas’ largest broker-dealers and largest money managers, but there’s a new No. 1 on the list of trust departments: Evolve Bank & Trust of West Memphis.

The broker-dealers list is ranked by number of registered representatives. The money managers list ranks registered investment advisories that are headquartered in Arkansas by assets under management as of their most recent Form ADV filed with the U.S. Securities & Exchange Commission. Bank trust departments and one standalone trust company are ranked by trust assets as of Dec. 31.

Among broker-dealers, Stephens Inc. reported 288 reps, up by 10 from last year’s list. Its nearest competitor, Edward Jones, reported 243, up six from last year.

Among money managers, Stephens Inc. reported a decrease in assets under management, from $14.05 billion to $12.43 billion in ADVs filed in September 2021 and September 2022. Stephens Investment Management Group LLC, which includes the Stephens Capital Management division, held essentially steady at $7.85 billion. Only five other money management firms in the state claimed AUM of $1 billion or more. 

One of those is the highest-ranked newcomer on the list: 36 North Capital Management LLC of Bentonville. Incorporated in September 2021 and registered with the SEC in January, 36 North debuts at No. 6 with $1.5 billion in assets under management as of May 1 — with a caveat. According to its ADV, 36 North has exactly one client account and that client falls in the category of a charitable organization. Chief Investment Officer Mark Fowler told Arkansas Business that a nondisclosure agreement prevented him from identifying the client.

“We had a good opportunity to chart a business with a local charity,” he said, so he and Carolyn Keating, head of private investments, left Cambridge Associates to start 36 North in northwest Arkansas.

Advertised as providing discretionary outsourced chief investment officer services, 36 North is not seeking to compete with general financial advisers. Instead, Fowler said, its target clients are endowments, foundations and wealthy families that have $100 million or more in assets to manage.

While it still has only one client, the firm “has lines in the water,” Fowler said last week.

36 North pushed Foundation Resource Management Inc. of Little Rock out of the top 10, despite FRM’s strong growth as it rebuilds from the loss of a major client before last year’s list. With more than $1.2 billion under management in June 2020, FRM’s assets plummeted by half as of March 2021 but were approaching $800 million in March of this year.

Trust Departments

Simmons Bank of Pine Bluff has been dethroned as the largest trust department in the state despite healthy growth in its trust assets under management. The new No. 1 in trust assets is Evolve Bank & Trust, which has been pursuing a strategy called “banking as a service” for about five years.

As Arkansas Business reported last month, Evolve offers services to more than 400 fintech partners “around the country and beyond,” according to CEO W. Scott Stafford. Its strategy has doubled its bank assets in 18 months, to $1.3 billion on June 30.

Evolve’s trust assets — managed, non-managed and custody assets — have grown even more, ballooning from $2.65 billion at the end of 2020 to $9.75 billion a year later. By June 30, the total was more than $12 billion, almost all of it in the category of custody assets.

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