Cambridge Associates, the $78 billion global investment consultant and management firm, has for decades worked with institutions and private families in Switzerland but never had an office there — until now.
The company, which agreed to acquire Zurich-based alternative investment specialist SIGLO Capital Advisors, will effectively become Cambridge’s first office in the wealthy country.
SIGLO, which has a team of 10 people, will give Cambridge deeper expertise in some asset classes and strategies that it knows investors, especially pensions systems, are interested in: insurance-linked securities, private credit, hedge funds, and impact investing. As part of Cambridge, SIGLO is dramatically expanding the solutions it can offer its clients. Cambridge already had more than 300 employees in 11 offices across the globe before the deal.
“The SIGLO team now gets to tap into our rather broad and expansive private equity, venture capital and our alternatives platform,” David Druley, CEO of Cambridge Associates, told Institutional Investor. “They're excited about what that means for their existing clients, but they're excited for what that means as they go to market for new clients as well in Switzerland.”
A nice pairing of investment management offerings is only part of the explanation for the deal. Acquiring SIGLO and gaining new, like-minded employees who are much closer to its existing client base in Switzerland was a “real allure” for Cambridge, Druley said. But the combination of SIGLO and Cambridge is creating a more formidable force to win opportunities with new clients.
Cambridge works with more than 50 endowments and foundations but none of those are in Switzerland, Druley explained. (The consultant also has more than 270 private clients and more than 90 global pensions.) Most of Cambridge’s clients in Switzerland are private families and pension funds, two areas where it seems there is opportunity to grow.
The Swiss pension market is more than $1 trillion and growing at a mid-single-digit pace, and the SIGLO team specializes in it. Meanwhile, private families are an exciting client segment for Cambridge.
“This is the fastest growing part of our business. We've been working with private clients and family offices for 40-plus years at this point, and we work with some of the most prestigious private clients across the globe,” Druley said. But even while the number of family offices continues to increase and they become more sophisticated investors, they are outsourcing more of their investment management.
“In the past when families became a certain size from an asset level, they would essentially build out their own internal investment office, and that still happens in a good number of cases. What we're seeing more and more of are these very sizable private clients building out the family office, but then outsourcing the investment function within that family office. It's a real trend we've seen in our business and there's a lot more momentum behind that trend today than there was, say, five, 10 years ago. It's very real,” Druley said.
Over the past 20 years, Cambridge has moved away from traditional investment consulting. Most of the business is choosing investments and managing portfolios on behalf of clients, which has pushed it to add offices around the world and employees with specific skill sets, experience, and client networks. The acquisition of SIGLO is just the latest example of that.
“We opened the office in Munich a few years ago and in Hong Kong a couple of years ago. There will be opportunities over time, we believe, to likely open other offices to get us nearer to our clients so we can best serve them wherever they are, or possibly help us to expand to new markets. This very likely will not be the last office we opened,” Druley said.
