Here is another example of the M&A carousel that has been spinning in Europe's private banking sector this year.

Geneva-headquartered Reyl & Cie Holding, the private bank and financial group, has entered a binding agreement to sell its 45 per cent stake in RAM Active Investments to Italy’s Mediobanca, fitting with a strategy by the Swiss firm to focus more on core wealth management and a growing corporate advisory line. When combined with the sales of other shareholders in the firm, the total stake sold to Mediobanca was 69 per cent. 

As a historical provider of seed money for RAM AI, Reyl will keep a 7.5 per cent stake in RAM AI and continue to be the preferred partner and anchor investor in the firm’s products, Reyl said in a statement yesterday.  

RAM AI’s partners, Thomas de Saint-Seine, Maxime Botti and Emmanuel Hauptmann will retain significant stakes in RAM and will remain committed to its development for at least the next 10 years, the bank said. 

Founded in 2007, RAM AI is an active and alternative asset manager offering a range of fundamental systematic equity and tactical fixed-income funds to an array of professional and institutional investors. As of 31 October 2017, RAM AI managed assets of $4.9 billion across 14 funds. (For comparison, Reyl oversees SFr15 billion in AuM ($15.3 billion)). 

“This partial exit fits well within REYL Group’s strategic plan. It will allow it to deploy significant capital in a number of key areas, including the implementation of an ambitious digital strategy around its wealth management unit and the build-up of its fast-growing corporate advisory and unlisted asset management franchises,” François Reyl, managing director of Reyl Holding, said. 

“It [the transaction] will also bring RAM AI several clear benefits, including long term seeding commitments across its product range and a larger distribution network within the EU, allowing it to achieve new milestones in its expansion.”

The transaction is subject to customary conditions, including approval from the relevant regulatory authorities, and is expected to close in the first half of 2018. Spencer House Partners LLP acted as financial advisors to RAM AI and the REYL Group in the context of this transaction.

Mediobanca said it is the “ideal institutional partner” because of a “strong cultural fit and solid foundation for future growth”.

The transaction is part of a series of merger and acquisition deals involving private banking houses in Europe. A deal that involved the sale of an Italian business, rather than that of an Italian firm making a purchase, happened in early November when Indosuez Wealth Management, the global wealth management brand of Crédit Agricole Group, agreed to by more than two-thirds (67.67 per cent) of Italian wealth management firm Banca Leonardo. Eventually, the group may own all of the Italian firm. The deal added €5.9 billion ($6.82 billion) of assets under management, based on figures as of 30 June this year.

Ray Soudah, founder of corporate advisory firm MilleniumAssociates, has told this publication that the next 12 months could see one of the big players in wealth management vanish as a result of industry consolidation - a trend that is far from complete - and cost-cutting will intensify.