M and A

INTERVIEW: Falcon Swoops On Venerable Swiss Firm; Eyes More Industry M&A

Tom Burroughes, Group Editor, London, 5 October 2012

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One of the oldest names in banking history will be consigned to the archives when Falcon Private Bank absorbs the London-based Clariden Leu (Europe) business that it bought from Credit Suisse.

One of the oldest names in banking history will be consigned
to the archives when Falcon Private Bank absorbs the London-based Clariden Leu
(Europe) business that it bought from Credit
Suisse, as reported here yesterday.

Bank Leu – which dates back to 1755 – became Clariden Leu in
2007 after merging with some of Credit Suisse’s other operations in 2007. But
rather than try and integrate the firm fully into Credit Suisse, the latter
bank has chosen to spin it off into the arms of Falcon Private Bank, which is owned by Aabar
Investments PJS, a company that is 95 per cent owned by the government of  Abu Dhabi.

The Clariden Leu brand will eventually disappear under a re-branding exercise. No final name has been chosen yet although it might be
prefaced by the word “Falcon”, Eduardo Leemann, chief executive of Falcon
Private Bank, told WealthBriefing in a telephone interview.

The purchase price of the deal was not disclosed. The
addition of the Clariden Leu (Europe) business
will increase Falcon’s assets under management to almost SFr15 billion (around
$16.0 billion) from SFr12.5 billion. A study this week by Scorpio Partnership,
the consultants, suggests prices for such businesses have fallen. Its 2012
Wealth Management Deal Tracker showed the valuations benchmark is now resting
at 2 per cent of assets under management compared to nearly double that in
2010. There are strong indicators this will continue downward to 1.5 per cent
in the next one or two years, said the report. This price change has spurred a
fuller pipeline, and M&A in wealth management has maintained pace in the
past 21 months, with over $9.42 billion being spent on deals involving high net
worth client funds.

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