A survey of trends and developments in the global market, highlighting major banks, wealth managers, and hiring news.
Geneva-based family office Amadeus and wealth manager Nucleo Capital have merged operations into a new firm called Amadeus Capital, offering asset & wealth management and family office services. The firm describes itself as a ‘family finlab’, aiming to offer solutions based on technology. Tim Brockmann, who led Amadeus, and Laurent Timonier, who was the president of Nucleo Capital, will be co-head of the new entity. Amadeus Capital manages an AuM of CHF 2 billion (CHF 1.2 billion invested in listed assets and CHF 800 million in private assets), with a team of 17 professionals.
Spanish Banca March and Syz Asset Management (the asset management arm of Swiss bank Banque Syz) have joined forces to launch an alternative assets-focused fund of funds strategy. The new investment vehicle, called BM Alternativos, will invest in Ucits funds following a broad range of investment strategies such as equity hedge, event driven, global macro, and relative value. Banca March’s views on equity markets will determine the fund’s assets allocation to equity hedge strategies, while Syz Asset Management’s market outlooks will be taken into account when building the fund’s portfolio.
Paris-headquartered Amundi, Europe’s largest asset manager by AuM, is setting up an asset management joint venture with Bank of China Wealth Management, a subsidiary of Bank of China, demonstrating a further opening of China’s financial industry to the international markets. The JV is set to launch mid-2020 and will leverage Amundi’s global investment management capabilities alongside Bank of China Wealth Management’s distribution and servicing capabilities to both institutional and individual clients.
Bank of Singapore continued to grow strength to strength through 2019 and pursued its European expansion which led to the growth of the new hubs in Luxembourg and London, while continuing to grow its strong and established teams in Asia and Dubai.
The bank is attracting the ultra-wealthy and family office clients, with the recent appointment of Hani Al Nabulsi as Head of Global Investors & Family Offices. Based in Dubai; Hani is a highly respected and a well-connected banker and manager in the Middle East & GCC regions and has worked in the US too. With his experience, the bank is building a robust business in the Middle East to attract clients from the GCC and other Arab countries.
BNP Paribas is considering cutting 250 employees in Switzerland, which equals to 18% of its 1,400 staff. As seen in an email statement from the bank “the plan is part of a wider transformation currently underway at group level and would allow BNP Paribas Suisse to increase its efficiency, in particular by better leveraging the synergies”. Both front office and back office roles will be affected during 2020 and 2021, mainly in Geneva.
The bank is launching a dedicated private banking and wealth management operation in Italy, based in Milan, through the bank’s Italian subsidiary BNL – BNP Paribas, and it plans to hire 200 professionals over the next three years, including investment experts and private bankers. The new unit will be headed by UniCredit veteran Elena Giotini. It is reportedly not interested in onshore acquisitions at this stage but will grow organically.
Brewin Dolphin has completed the acquisition of the Irish wealth management unit of Investec for a net consideration of €44 million. Investec Irish wealth business, headquartered in Dublin, controlled €2.9 billion in assets which have been combined with Brewin’s existing Irish business, making it rise in the top three wealth managers in Ireland with a total of €4.8 billion in AuM.
Brooks Macdonald (BM) has entered into a binding agreement to acquire 100% of the issued share capital of Edinburgh based wealth manager Cornelian Asset Managers, while also sealing a £30 million share placing to fund the deal. Brooks Macdonald will pay an initial £31 million for the company – £22 million in cash and £9 million in BM shares – with a further £8 million cash if Cornelian meets certain retention and growth targets as well as expected cost synergies. This is part of the firm’s strategy to continue with relevant acquisitions while growing organically. Completion is expected in the first quarter of 2020 subject to regulatory approval. Cornelian has around £1.4 billion in funds under management (discretionary) with revenues of £10.3 million in the year to 30 September 2019.
Hong Kong-based multi-family office Carret Private Investments, born from New York-based asset manager Carret founded in 1963, has merged with Singapore-based MFO Lumen Capital Investors (LCI), creating a US$2 billion AuM venture. The cooperation includes portfolio management, research, business development, and operational optimization. Both LCI founding partner, Wilfried Kofmehl, and Carret Private chief, Kenneth Ho, are ex-Julius Baer bankers in Asia. For the time being, both firms will continue to operate in their respective markets under their existing name brands.
Zurich-based wealth manager Clarus Capital has been granted a license to open a representative office in Kazakhstan, its first office outside of Switzerland. Kazakhstan is the main international market for the wealth manager. The office is headed by Yergali Kalibekov who has recently joined from National Bank of Kazakhstan and will facilitate relationships with existing key clients in the country, as well as develop new business relationships.
Philipp Wehle, Credit Suisse’s recently appointed CEO for international wealth management (IWM), is driving the creation of a new subdivision to cater clients with assets of around US$20 million that he thinks could be the most lucrative segment to the bank. These clients aren’t in fact rich enough to need the bespoke services demanded by the UHNW clients and the bank can make larger use of technology to serve them, cutting costs and increasing margins. It’s the lowest of three classes in the bank’s IWM business. Ultra and entrepreneurial high-net-worth clients are next, and strategic clients (mostly billionaires) are at the top.
Due to negative interest rates, Credit Suisse has joined a number of competitors like UBS and Julius Baer in charging clients for fiat cash deposits in Switzerland, starting January 1st 2020 for individuals. Clients with balances of over CHF 2 million (US$2.02 million) are charged at a rate of -0.75%, and those with balances of more than CHF 10 million will pay a higher rate of -0.85%.
The bank has taken a more conservative approach to Brexit with regards to its business with European HNW & UHNW international clients in London. While the teams covering international (non-European) clients such as Middle Eastern, Southeast Asian, Indian, African and Latin American clients are not affected; the bank’s relationships with clients from mainland Europe (Italian, French, Spanish, Portuguese and Benelux origin clients) previously managed in London are now being moved to Zurich or onshore in those countries.
Credit Suisse Group is considering a return to the US, four years after it closed its domestic US private bank partly due to a US$2.6 billion fine for helping US clients evade taxes and transferring its US brokerage business to Wells Fargo & Co. Reports have been citing the bank’s intention to add US$15 billion of AuM at a new base in Miami, to mostly service Latin American HNW & UHNW clients, although talks are at early stage and no final decision has been taken.
Credit Suisse Asset Management is integrating environmental, social and corporate governance factors (ESG) into its investment process. About 30 actively managed investment funds with more than CHF 20 billion of assets have already been repositioned to fulfil the ESG criteria defined by the Credit Suisse Sustainable Investing Framework that will complement the broad offering of sustainable and impact investment options on Credit Suisse’s private wealth platforms. The target is to expand the ESG offerings with an estimated total of over CHF 100 billion of AuM by the end of 2020.
The bank has teamed up with Lombard Odier to launch a new thematic fund available to both institutional and retail investors called “Credit Suisse Responsible Consumer”. The fund invests into companies reacting to the shift towards sustainability in consumer behavior across the sustainable food, urban systems, supply chains and sustainable lifestyles industries. Lombard Odier will be the advisor to the fund.
Deutsche Bank continued to push its wealth management expansion throughout 2019, with a transformation strategy to cut back on investment banking and add about 300 client-facing wealth management professionals over the next two years, focused on bankers dedicated to entrepreneurial families in Europe, as well as the US and emerging markets such as Middle East and Turkey. The bank reaffirmed its commitment to delivering the transformation strategy within existing capital resources, maintaining a Common Equity Tier 1 (CET 1) ratio of at least 12.5% throughout this process. The wealth unit aims to boost revenues by 6% year-on-year.
Wealth management firm Dolfin Financial has announced the launch of a Private Investment Club to provide exclusive and pre-screened investment opportunities to the firm’s clients across the UK, Europe, Africa and the Far East. Deals can be accessed through a customised online portal showing Dolfin’s own deal analysis, and it allows clients to meet directly with the management of potential investee companies. Investment opportunities can be advised or non-advised and span equity, mezzanine and debt markets opportunities.
EFG International has received approvals from the Dubai Financial Services Authority to open an advisory office in Dubai, executing on its growth strategy to expand its footprint in the Middle East with a local office. Dubai is headed by Sascha Pietrek who joined from Deutsche Bank and will be reporting to Adrian Kyriazi, Head of Continental Europe and the Middle East. The bank has already recruited 22 employees for the office, and it expects the office to grow to 30 by the end of 2020. The target is to reach CHF 3.0 billion in AuM by 2022.
EFG recorded a slow asset growth despite a push in hiring and increase in number of relationship managers, with net new money growth of 1.7% in the first nine months of 2019 to CHF 150.7 billion.
Ex-Stanhope Capital members Julien Sevaux and Tarek AbuZayyad have founded a new private investment office called Eighteen48 Partners (Eighteen48). The firm addresses the needs of professional investors, sophisticated families and institutions; with investments made across all asset classes, including via third party funds and direct investments. Eighteen48 has secured more than US$600 million in AuM from its founders and a group of prominent strategic investors, many of whom are shareholders, clients and advisors of the firm. They manage their own capital alongside that of their clients and co-invest with them, which is one of the reasons why, according to Julien Sevaux, they have been able to build a high degree of trust.
Fideuram, Intesa Sanpaolo’s private banking network is launching the fourth generation of the Fideuram Alternative Investments (FAI) platform in partnership with alternative asset manager Tikehau Capital. The fund will offer European private markets investment solutions to private clients of Fideraum, offering a bespoke multi-asset solution by investing across private debt, private equity, real estate, and special opportunities; and it has announced a fundraising of over €400 million. Over 3,000 clients of Fideuram have already subscribed.
Goldman Sachs is launching digital wealth management services for investments as low as US$ 5,000 with a new robo adviser. The effort is led by Joe Duran, founder of United Capital, a wealth management firm bought by Goldman Sachs for US$750 million last May. It complements the launch of Marcus in 2017, a retail platform that offers savings accounts and personal loans with no minimum initial deposit or ongoing minimum balance requirement. The bank has also invested in Nutmeg, the British digital wealth adviser, which is set to launch a tax-free investment account under its Marcus brand in the UK next year.
Goldman Sachs said it will provide US$750 billion in financing, advisory services and investments towards projects that fight climate change or help financially disadvantaged people, as well as those that foster economic opportunities for under-served people over the next decade. The figure is a mix of loans, underwriting, advisory services and investments related to projects Goldman expects to be involved with by 2030. The bank also updated its internal environmental policy and it will no longer provide financing to any new projects that will drill for oil in the Arctic or that create new thermal coal plants or new thermal coal mines.
Edinburgh-based private bank Hampden & Co is acquiring a loan book from London-headquartered wealth manager Smith & Williamson, which recently announced a strategic move to relinquish its banking licence ahead of a £625 million merger with financial planner Tilney. The loan book is secured against Smith & Williamson’s client investment portfolios and is worth approximately £35 million.
Caroline Fiala, Director at Swiss wealth manager Swisspartners, and Shanu Hinduja, Chair of Geneva-based Hinduja Bank are establishing a tie-up between their firms. Both Caroline and Shanu are two prominent female bankers looking to take over the businesses from their respective fathers and are both calling for actions for diversity and equality in finance. They have announced a closely cooperation between the two firms: Hinduja has a banking license, while Swisspartners possesses extensive expertise in wealth planning.
HSBC Private Bank aims to increase its Asian business, especially its onshore presence in China, which it sees as the country with the most growth potential. The bank has offices Shanghai, Beijing and Guangzhou and is looking to grow the onshore presence in the coming years.
HSBC’s assets managed by the private bank rose 9.4% in the first nine months of 2019 to US$338 billion (£263 billion), while revenue rose 4.6% versus the same period a year earlier to US$1.4 billion. The unit is the smallest contributor to group revenue at 3% and Asia is the single largest market, accounting for 42% of the total private banking AuM.
HSBC Switzerland has been fined for US$192 million by the US for helping US customers hide more than US$1 billion in assets from tax authorities between 2000 and 2010.
ING is restructuring its private banking unit and it has been reported that the bank plans to cut 60 out of 600 jobs across private banking in a bid to boost efficiency by centralising and automating administrative work. The bank commented that all 16 private banking branches will remain open.
Anglo-South African financial services group Investec is restructuring its business and expects to raise approximately £189 million from the sale of around 10% of its asset management arm, which is being spun off and being renamed Ninety One, taking the name from the year it was founded. Investec will hold a 37.7% stake in Ninety One when it lists on the London and Johannesburg stock markets. The split is planned to take place on March 13.
The firm sees the UK financial planning market as one area that can drive the most growth “by extending Investec Wealth & Investment’s proposition through the expansion of its UK financial planning capabilities” and it intends to replicate this push in its home market of South Africa. Investec manages over £119 billion in assets.
J.P. Morgan Private Bank has launched a trust company in Singapore, named J.P. Morgan Trust Company (Singapore), to be able to better support its Asian and Middle Eastern clients and families in managing their wealth and planning for succession. The new company is led by Ethan Chue who joined from Rothschild Trust Singapore in the middle of 2018 and includes four trust officers and a dedicated trust compliance officer. The team will be based in Singapore and supported by private bank functions in Asia, the US and Europe, as well as trust company experts in the Bahamas. Ethan Chue reports to Martin Pollock, Head of International Trusts & Estates.
JPMorgan Chase & Co has reorganised its US wealth management unit and has merged some of its wealth operations into a new unit focused on advising HNW clients with up to US$10 million in net worth, led by Kristin Lemkau, formerly Chief Marketing Officer of JPMorgan Chase. Kristin will become the new CEO of the US wealth management business, reporting to Gordon Smith, Head of the consumer bank. The Chase Wealth Management and J.P. Morgan Securities operations will become one unique unit with US$400 billion in assets, which will also include digital wealth management and the You Invest team, in a bid to increase the market share of US HNW individuals, currently standing at only 1%.
J. Safra Sarsin continued to successfully boost its London headcount of bankers and increase private banking assets managed in the UK. The firm has made successful senior hires in the past 12 months, including senior and experienced bankers covering Greater China, Southeast Asia, Western and Southern Europe among others.
With the recent hire of former Credit Suisse senior banker and manager André Guimarães in London, J. Safra Sarasin has reiterated its intention to build a strong team covering Western European and Brazilian UHNW & HNW individuals. Under the guidance and expertise of André, the bank is also planning to launch a new dedicated effort to target wealthy finance professionals
Julius Baer is blending together investment and wealth management solutions across discretionary and advisory services, with the appointment of Nicolas de Skowronski, former Head of Advisory Solutions, as Head of Wealth Management Solutions. He will continue to be a Member of the Executive Board. The executive boards of Julius Baer Group and Bank Julius Baer will now be aligned, with the same members serving on both boards and reducing the headcount from 15 to 9 members. These are: Philipp Rickenbacher, CEO; Yves Robert-Charrue, Head Switzerland & EMEA; Jimmy Lee Kong Eng, Head APAC; Beatriz Sanchez, Head Americas; Nic Dreckmann, COO & Head of Intermediaries; Nicolas de Skowronski, Head of Wealth Management Solution of Investment & Wealth Management Solutions; Yves Bonzon, CIO of Investment & Wealth Management Solutions, Dieter A. Enkelmann, CFO; and Oliver Bartholet, CRO.
Under Philipp Rickenbacher, the bank is also preparing for a number of job cuts disclosed in the latest annual strategy review which is being finalised this January 2020. The cuts will include unprofitable client advisers and rumors say cuts could amount to about 5% to 10% of the workforce. Details are expected to be soon announced.
Former UBS top private banker Juerg Zeltner has been working towards a six- to eight-year plan to revive KBL, partnering with Qatari family al-Thani who owns the wealth manager that has a current global AuM of approximately €72 billion. Zeltner has a direct and close relationship to influential members of the al-Thani family dating back to his UBS days; he has partnered with the family and bought a stake in KBL with his own money, while tapping Qatar for a cash injection.
Zeltner has started with an “expensive” recruitment campaign to attract front office bankers and implementing the product offering (quite a few initial hires are his former UBS colleagues); and at least two years of losses are expected before Zeltner can begin to show the fruits of his work. He has already bought Zurich-based Bank am Bellevue in the middle of last year through which it established a Zurich office. It plans to expand into the Middle East as well as Asia in the near future.
London-headquartered Kingswood Holdings continues its expansion bid in the US and it has announced the acquisition of an 85% stake in Chalice Wealth Advisors (CWA), a corporate RIA, and Chalice Capital Partners (CCP), a broker/dealer, within a strategy to seek new distribution channels in the US for its wealth solutions. Chalice, founded in 2017 by Keith Gregg and Derek Bruton, has amassed assets under management of US$1.15 billion to date. The combined platform serves 50 independent financial advisors and 104 licensed representatives and Derek Bruton will be the CEO of the acquired businesses going forward. Kingswood plans to use CWA and CCP as one of its centralised hubs, providing a platform for future acquisitions and product offerings in the US. This is Kingswood’s second acquisition in the US, following that of Manhattan Harbor in 2019. The deal is subject to US regulatory approval.
Lombard Odier has continued expanding in the middle east through its two regional offices of Dubai and the recently opened Abu Dhabi. Since 2018, the bank has been offering certified Shariah compliant investment solutions, which has led to the recent award as ‘Best Islamic Wealth Management Proposition’ at the Islamic Business & Finance Awards 2019. Lombard Odier is the first Swiss private bank to have opened in the Abu Dhabi Global Market, the international financial centre.
Patrick Odier, Lombard Odier’s Senior Partner, has recently stated in an interview with the FT that the bank is looking to partner with other firms in order to target wealthy clients in China, for example by joining forces with a local bank. The bank has offices in Hong Kong, Singapore, and Tokyo, but in recent years it has entered into various JVs with local banks tapping into markets like Thailand, the Philippines, and Indonesia.
Independent wealth manager Marcuard Heritage, founded in 2003, has bought a minority stake in Geneva-based wealth management firm Atlantis Marcuard Switzerland, a newer family office set up in 2016. This allows for close cooperation between the two family offices, giving Marcuard Heritage access to the French-speaking region of Switzerland and the ability to attract private bankers in that region, while it provides Atlantis Marcuard with the large offering and expertise of 17-year old Marcuard Heritage.
Genevan private bank Mirabaud has officially launched an office in Abu Dhabi through a local partnership with SBK Holding, a vehicle of Sheikh Sultan Bin Khalifa Bin Zayed al Nahyan, ruler of Abu Dhabi. This complements the Dubai office that has been operating since 2007 currently employing 40 professionals, and it will offer domestic and international wealth management services. The Abu Dhabi office targets wealthy Emirati individuals and is headed by Ronald Tamer, who recently joined the bank from bank Al Khaliji France. On June 2019, Mirabaud had global AuM of approximately CHF 34 billion, of which CHF 7.2 billion managed by the Asset Management arm.
Pictet Wealth Management is developing an Asia-focused ESG solution for clients, according to David Gaud, Asia Head of Discretionary Portfolio Management and Chief Investment Officer. The firm already runs a global multi-asset responsible investment offering mandate, which is available to clients based in Asia, but it is now working on a multi-asset Asia offering as it recognises a trend among clients in the region to consider ESG in their wealth management decisions.
Raffles Family Office, an Asia-based independent asset manager with offices in Hong Kong, Singapore and Taipei, is targeting onshore Chinese wealthy individuals through a new joint venture with wealth management fintech platform iFast. The JV is called Raffles China Family Office and is headquartered in Shanghai, with plans to expand into Beijing, Chongqing and Zhejiang in the future. Raffles Family Office has over US$2 billion in assets under management and plans to grow through further acquisitions of smaller asset managers with US$50 to US$200 million both in Hong Kong and Singapore.
RBC Wealth Management has reiterated its intention to grow the Asian business, under the guidance of recently appointed Wealth Management Asia CEO Terence Chow. The bank opened a booking centre in Hong Kong last year to support Asia’s growth, adding to the other offshore booking centre of Singapore, as well as onshore booking centres in Taiwan, Australia and Japan. The targets are on Asia’s global families with links to Anglo economies, overseas business interests and foreign investments, as well as rich Canadians living in Asia. Chow noted that although the segment may appear relatively niche, Hong Kong alone is home to 400,000 mostly affluent Canadians with global banking and wealth management needs.
Swiss bank Reyl has launched an independent asset management affiliate exclusively dedicated to social and environmental impact investing, called Asteria. It has named Katia Coudray, who joined the bank in January 2019 and was latterly Head of Impact Investing, as Head of the new fund management arm. It has started with a team of five professionals.
Schroders has announced its commitment to integrate ESG processes into all its funds by the end of 2020. It currently covers approximately £230 billion (half of its assets). The accreditation spans ‘screened’, ‘integrated’, ‘sustainable’ and ‘impact’ categories, to help clients understand the different roles that ESG plays in the investment process, and it will be documented in the funds’ respective factsheets. ‘Screened’ funds exclude certain activities from the portfolios; ‘Integrated’ funds consider ESG factors throughout the investment process; ‘Sustainable’ funds aim to identify the most sustainable companies; and the ‘Impact’ accreditation highlights funds whose goal is to achieve specific and measurable ESG impacts.
The firm is planning to cut hundreds of jobs across its global offices and has already started with the process. About 5% of the total employees, or at least 200 jobs, are expected to be affected. An official plan has not yet been released.
Toronto headquartered Scotiabank has launched Global Wealth Management as a formal and distinct business line, given the important growth it registered over the last few years and its increased contribution to all-bank earnings, highlighting the importance that this area will play in the bank’s growth strategy for the coming years. The bank has announced that with the growth in business from the wealth segment, it is also investing to add new capabilities and products for its wealth management clients, to attract Canadian origin as well as international clients.
UK-based wealth manager Succession Wealth has opened new headquarters in Birmingham, housing 60 wealth planners and client support staff along with members of the senior leadership. The firm has 14 offices all in the UK, with 175 wealth planners nationally and a total of 460 staff.
Last month, the wealth manager acquired UK-based financial advice firm Investors Planning Associates adding almost £500 million in funds under management and bringing Succession Wealth’s funds to about £8.5 billion. The firm stated it remains in the lookout for further acquisitions with a target to reach £10 billion in the near future.
Three months after Iqbal Khan joined UBS as Co-President of Global Wealth Management, alongside Tom Naratil, Khan has presented his plan for wealth management with quite a few measures resembling the ones he previously implemented over his time at rival Credit Suisse. Although a full UBS strategy update is still to be published, it is set to include the following measures:
The bank has opened a new office of the UBS Optimus Foundation in Singapore, making it the seventh office globally and the third office in Asia, on top of the Hong Kong and Beijing operations. Established in 1999, the UBS Optimus Foundation is an independent grant-making foundation that engages clients in activities related to health, education, and the protection of their children.
UBS plans to take advantage of the opening of China to foreign banks by lifting the stake in its joint venture in the country, UBS Securities China, from 51% to 100% by the end of the year. It offers investment banking, fixed income, securities operations and onshore wealth management services.
The bank received two large fines in Hong Kong and Singapore. In Hong Kong, it was fined HK$400 million (CHF 51 million) for having overcharged bond transactions for some 5,000 Asian clients between 2008 and 2015, due to a failure in the bank’s control mechanisms. Singapore, on the other hand, conducted its own investigations and fined UBS for S$11.2 million (CHF 8 million). UBS showed full cooperation during investigations.
The global wealth management unit of UBS posted an adjusted pre-tax profit of US$919 million for the third quarter of 2019, a 2% decrease from the same quarter in 2018. Adjusted operating income at the unit increased marginally to US$4.14 billion on a year-on-year basis.
Swiss private bank Vontobel has announced that it is exiting its brokerage business and planning to focus its efforts on investment management, offloading its equity unit to Zuercher Kantonalbank (ZKB) including six employees of Bank Vontobel Europe AG in London. The transaction is expected to be completed at the end of 2020, after which the bank will continue advising wealthy clients on ECM and DCM transactions but execute them via third party partners, rather than in house.
The bank has launched a trade tensions-themes emerging markets certificate, the Vontobel Trade Conflict Winners Emerging Markets Index, that will allow investors to participate and capitalise from potential market changes resulting from on-going trade tensions. The Index is produced together with American firm Eurasia Group, a firm that focused on helping investors understand the impact of politics on risks and opportunities in foreign markets and is based on various scenarios from a joint study conducted by the two firms. Vontobel managed CHF 73.6 billion in advised client assets in Combined Wealth Management as of mid-2019, and total advised client assets of CHF 212.9 billion.