Strategy

Julius Baer Plans to Make a Splash on Return to Asia

Lachlan Colquhoun, Asia Pacific Editor, Sydney, 27 November 2006

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Swiss wealth manager Julius Baer has returned to the booming markets of Asia and believes a combination of its new-found scale and historic ...

Swiss wealth manager Julius Baer has returned to the booming markets of Asia and believes a combination of its new-found scale and historic premium brand will prove an attractive offer for high net worth individuals in the region.

After acquiring three Swiss private banks and international asset manager GAM recently, Julius Baer is now armed with a double-A rating and more than $260 billion in assets under management.

This month, Julius Baer has launched two offices in Asia – one in Singapore and a North-Asia hub in Hong Kong with a total of over 100 employees who will service clients in every country of the region, including Australia.

Andrea Benenati, the chief executive for North Asia, told WealthBriefing that Asia has now become Julius Baer’s major international investment.

“We are currently investing around SFr80 to 100 million ($80 million) in Asia and with the recent acquisitions we have the size and capabilities we didn’t have before,” he said.

“Now we have some targets. Our global private banking operation has SFr123 billion ($100 billion) in assets under management and in five years time we want a quarter of our assets under management to be from emerging markets, the majority out of Asia.

“And our other target is that we want to break even in Asia by the end of 2008.”

When Julius Baer made its acquisitions it also acquired the Singapore operation of merchant bank Banco di Lugano, which already had a substantial base in the region. That has been rebranded and is now a fully-fledged booking centre for the private bank.

In Hong Kong, where Julius Baer closed its office several years ago, a new representative office was opened in January of this year and an investment advisory licence was granted in September.

These developments also involved the active recruitment of an experienced team of wealth managers, whom Andrea Benenati says are one of the bank’s major assets in its regional strategy, which is targeted at clients with at least $5 million.

“All our employees have been in this business for many years. They are native here or have lived in Hong Kong for at least five to ten years. Although the brand name is rather ‘new’ in Hong Kong, the employees are not, as they have extensive experience in this market” he said.

“They have all got their own networks so they will bring in the people they know and have had dealings with.”

Being a new operation, Mr Benenati says Julius Baer has the advantage of being able to “start things from scratch to build the way we think our positioning should be”.

“There are many good things at the big banks but there are also many bad ones and we have the opportunity to take the good experiences and implement them and do it right,” he said.

One of the main principles, says Benenati, is to “put the client, and not the product first”.

“Due to certain pressures on the big banks such as shareholder value pressure, the big banks are very product focused, bankers are given product quotas and their performance evaluation is based on that,” he says.

“In my opinion that’s not the right approach and it is not private banking as we understand it.”

Instead, he says, Julius Baer has a truly customer-centric approach where the relationship managers operate as “points of entry” to the bank.

“Once we find out what the client wants, whether it is investment opportunities, or inheritance and tax planning, we take a gang approach and bring in the specialists so we can offer them a service that they really need, not something which we think is right for them,” says Mr Benenati.

He believes Julius Baer’s brand reputation as “a very exclusive bank” and its tradition of close client relationships and trust will stand it in good stead as it builds its Asian business.

“People are very tradition oriented in Asia, and those people who know us realise that we were established in 1890 and that is very well received here,” says Mr Benenati.

“If you go to the really sophisticated high net worth people, those who are knowledgeable about the finance industry, they know our brand and what it means.

“Our job is now to take that tradition and the values which make up our brand and make sure we implement it in Asia.”

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