Six months ago, when his family relinquished the majority rights of Bank Julius Baer through a new shareholder structure, chairman Raymond Baer promised that the firm would use the new arrangement to acquire rather than be acquired. So far he’s keeping that promise.
Last month, Julius Baer Group completed a Sf5.6 billion ($4.48 billion) deal for four UBS companies: boutique banks Banco di Lugano, Ehinger & Armand von Ernst and Ferrier Lullin, and global asset manager GAM. The new acquisitions have a combined Sf119 billion in assets under management and 1,700 employees.
Two top executives will travel with the firms: Johannes de Gier, former wealth management CEO at UBS’s SBC, will become Julius Baer Group’s new chief executive, and David Solo, who headed up GAM, will lead the firm’s asset management division.
“Yes, we kept our promise, but not just for principle’s sake. We had the lucky coincidence that these three banks came available,” Raymond Baer, 46, tells Institutional Investor.
With this transaction, Baer’s assets grew to Sf270 billion, allowing the bank to boast that it is now Switzerland’s biggest pure-play wealth manager. Moreover, Raymond Baer adds, the deal gives the 115-year-old institution a presence in all major Swiss banking centers and “serious money to invest in growing.” One target will be Asia.
Ray Soudah, founder of Millenium Associates, a Zug-based consulting firm, says the buys make Baer “more independent and more difficult to be taken over.” But although he sees expanding to Asia as a necessity, he thinks the action could prove to be too little, too late. “UBS has 2,000 people in Asia,” he points out.
Soudah’s prediction? For the bigger, better Baer, acquiring “net new money is going to be a big challenge. Lugano is a long way from Beijing and Taipei.”
But Baer’s chairman points out that the bank can make inroads in Asia using Banco di Lugano’s banking license in Singapore and GAM’s 80-person office in Hong Kong. “Overnight we have a completely new game,” he says.
