A relatively modest Spanish private bank is looking to spread its wings and has Asia in its sights, a senior executive has told this publication.

The March Group is hardly a household name in Asia but the Spanish private banking and investment house hopes that its focus on wealth protection and strong family-ownership culture will wins fans in the region.

The privately-owned wealth management, corporate banking and asset management business, set up in 1926, is so far confined largely to Europe; the asset management side of the group, March Gestión de Fondos, is not a top-bracket force yet with a total of €2.2 billion (around $2.92 billion) of assets under management. But that figure represents a fourfold rise over four years – a gain that many of the bigger Spanish financial institutions can only envy. Assets under management in the investment fund sector in Spain have fallen by 30 per cent, on average, over the past four years.

MGF is now looking to get business in the UK and is also beginning to explore the idea of reaching out to clients and potential business allies in the Asia-Pacific region. These are very early days in such a move, Jose Luis Jiménez, chief executive of MGF, told this publication recently during a trip to London. 

“We have a very open mind when it comes to Asia. We acknowledge it’s a very hard market to break into, and we have no Asia-specific capabilities and do not plan to build these up ourselves - hence we would like to partner with a local firm which has these capabilities and knowledge,” he said. “Asia is a tricky market for us because Asian investors are very yield- and risk-hungry, often looking for 10-15 per cent returns but our conservative [investment] approach won’t change.” 

The potential appeal of a 100 per cent family-owned firm, with a specific focus on wealth-preserving strategies and a proven track record, could be very appealing in a region where family-run business is the dominant model, he added.

Jiménez said his firm has looked to partner up with a boutique asset manager or wealth manager for the past one-and-a-half years.

Family values

Jiménez referred to the word “family” repeatedly, focusing on the strong involvement of the March family that lent its name to March Group, formed in the mid-1920s by Juan March Ordinas, in Palma de Mallorca. The group comprises three elements: Banca March, the private bank and its associated asset manager; a cultural and scientific institution Fundación Juan March; and a holding company called Alba, in which the family has a controlling stake. Across the entire group, it has assets totalling €20 billion.

Warming to the family theme, Jiménez said academic and other research proved that family-run businesses typically outperform other company models over the economic cycle. This family focus should appeal to Asian clients, where such business models are the norm, he said. To highlight this further, the banking and investment firm is a member of the Spanish Association of Family Businesses.

The gains in Spain

While Spain has had well-documented economic and financial woes since the credit crisis – such as high unemployment and a slump in property prices – March Group has seen its fortunes improve, due in part to a conservative approach to risk, he said. Since 2007 – before the full debt crisis exploded – MGF has not held financial services investments, although it is starting to get back into the sector.

“Thanks to the [financial] crisis people realise that having a business like this is a good idea in the long run…we have stuck to our principles,” he said. He said the bank has not been harmed by Spain’s well-chronicled economic problems, such as the collapse in the property market. “For us, we see the Spanish market as a huge opportunity for us. Most players in Spain are seeing their markets decreasing. The Spanish asset management sector has gone down, in assets under management, by around 30 per cent [since the start of the crisis].”

For example, he said clients had been surprised that the bank chose not to invest in property in the “boom years” and in fact turned them away to competitors who had a place on the “property ladder”.

Despite what might be an exclusive image, March Group did not turn up its nose at those outside the ranks of the super-rich, he said, and pointed out that there is no minimum investable asset size requirement for clients. “The perception that ordinary people have is that the bank is only there for the very rich but we have a lot of 'mass affluent' clients also,” he continued.

No wine hangover

The asset management business has a variety of funds, adopting a value-investing style, on offer both for local consumption and international investors using a Luxembourg based SICAV. The SICAV has three main funds, the Torrenova, a global equity fund, which is based on the family’s own long term investment strategy; the Family Businesses Fund, which invests only in quoted family businesses and the Vini Catena fund – a global equity fund which invests in the wine industry.

The Family Businesses Fund holds listed companies where there is a controlling family stake in the business. This portfolio is global in its geographic scope, he said.

In the case of the wine fund, its focus on what might sometimes appear a niche sector has nevertheless logged a 28.84 per cent return after it was introduced into European markets over three years ago (data is based on the period from inception to 30 November last year). The fund holds €53 million of assets. That performance compares with the 13.18 per cent return on the MSCI World LC index for the same period.

Footprint

At present, March Group is a European player with a Spanish core. Among its clients are family offices. It has customers from countries such as Austria and Italy, and has an office in the Eastcheap area of the City of London for UK clients normally resident in Spain.

The MGF business is looking to engage in the UK with professional investment clients such as private banks, fund of funds, family offices and private client advisors.

So this is a venerable Spanish firm which so far might not have set the world alight but it could become better known. “We are an investment boutique and we do a few things – we don’t pretend to be Masters of the Universe,” Jiménez concluded.