Pictet’s Collardi coup rewards bank on right track
Having ruled the roost at Julius Baer for almost a decade, eyebrows were raised when Boris Collardi signed up to run Pictet’s wealth management business. But will he be able to exert the same influence he enjoyed in his old role?
A terse, six paragraph announcement from the Julius Baer Group, warning of an imminent “leadership change” at the bank’s Zurich headquarters, spoke volumes about the realignment of Switzerland’s private banking stars.
Not only was Boris Collardi, the slick-back-haired CEO of Julius Baer resigning from the helm of the Zurich-based bank, but he was defecting to co-head the global wealth management operation of smaller rival Pictet, alongside Rémy Best, in French-speaking Geneva.
As the poster-boy of Swiss private banking, Mr Collardi could do no wrong for many years, although he had been growing restless. Having earned his spurs at the Asian franchise of Credit Suisse, he immersed himself in the region’s culture and quickly established Asia as Julius Baer’s “second home market”. He brought a large dose of the Asian experience home to his Bahnhofstrasse HQ, remodelling the offices with flowing water features, flanked by tropical vegetation, with the help of a ubiquitous feng shui master.
The acquisition of Merrill Lynch’s international wealth management business, where he won over sceptical local staff and clients with an intense series of ‘town hall’ meetings across the globe, further sealed his credentials, boosting client assets to just shy of the SFr400bn ($403bn) barrier.
So what made this 43-year-old dynamo, apparently at the top of his game, up sticks for a smaller bank, with the staid reputation of a partnership?
There is no doubt the signing is a major coup for Pictet. “Boris Collardi is phenomenally well-liked. He is certainly not your archetypal Swiss banker and really stands out,” says Matt Jenkins, a headhunter at Syracuse Partners.
Branding power
Indeed, despite a smaller global footprint compared to Julius Baer, many would argue the Geneva bank enjoys a stronger brand resonance. Its successful entrepreneur-owned business model chimes more closely with the types of customers private banks are trying to attract, in an era where every competing institution claims to be the pre-eminent “bank for entrepreneurs”.
There is a sense in the private banking world that Pictet has not really generated the praise it deserves over the years. “The last decade of the Pictet story has been entirely about modernisation and an aggressive exercising of the power of its brand to help drive new business its way,” says independent private banking consultant Seb Dovey. “Most underestimate that what Pictet has done brilliantly has been to transition its relatively obscure Swiss identity into a household name across all the mansions around the globe.”
There is a sense in the private banking world that Pictet has not really generated the praise it deserves over the years
Whereas Bank Julius Baer has long prided itself as a ‘pure play’ wealth manager, having sold off its funds business in 2009, Pictet has recognised asset management as a key driver for growth alongside wealth management. “It gives a stability to the overall institution that one leg does not,” says a commentator close to Pictet management in Geneva. “Pictet has clearly succeeded in this niche.”
Moreover, the steady stream of asset management revenues has long helped smooth over any potential profit volatility at the Geneva bank.
Indeed there is a feeling that as an enterprise, Pictet has been more transformative and adaptive than most assume and has generally been leading rather than following the breakthrough changes in private banking.
Innovations in portfolio management have been at the centre of this. “HNWIs want wealth managers to have access to investment capabilities across the whole waterfront to deliver good returns over different phases of market cycles and investment themes,” says Amin Rajan, CEO of Create-Research. “Having an in-house investment manager with ultra-demanding institutional clients can be a big positive.”
What’s more, investing is becoming heavily nuanced and reliance on old-fashioned ‘modern’ portfolio theory for asset allocation purposes is an anachronism. The partnership structure at Pictet, where those responsible for asset management and private banking meet each morning to thrash out the issues is a lot more conducive to the genuine collaboration needed to profit from this new reality.
The challenge for the freewheeling Mr Collardi, recently divorced from his Singaporean wife, will be whether he can integrate successfully into this much more tightly defined and formalised decision-making structure and will start to feel claustrophobic from the regular partners’ meetings. Then again, he is from Nyon, so will essentially be back on home turf.
Observers are curious to see how much slack the other partners will allow him when co-running the wealth management franchise. “Boris has been in almost total control of Julius Baer for nine years. It is not exactly a dictatorship, but he is always at the helm,” says Mr Jenkins at Syracuse Partners. Observers say he may experience a culture shock in terms of how much less influence he will enjoy.
Under Mr Collardi, Julius Baer has increased international penetration. There will no doubt be a queue of high-profile visitors heading to the Bahnhofstrasse boardroom for talks on potential recruitment and a whole new leadership team might emerge. There will also be renewed speculation on whether Julius Baer will merge with another institution, with a possible tie-up with Credit Suisse once more delighting the Zurich gossips.
Few doubt both Pictet and Julius Baer remain on an upward trajectory. Swiss banks will remain hugely relevant in wealth management.
Barclays’ brush off
With Barclays, however, another big brand bank recently in the news, the prognoses are not so positive. Voices within the bank, which once enjoyed an excellent global wealth management footprint, especially in Asia, have mooted a return to the glory days, hinting at international expansion.
But the announcements have been taken with a pinch of salt by the global private banking community.
“There is no demand for any newcomers in Asia,” says Ray Soudah, founder of the MillenniumAssociates strategic consultancy in Zurich. “The national champions like Bank of Singapore and DBS will gradually but surely begin to dominate first the top five and eventually top three rankings.”
The private banking world is unrecognisable from 10 years ago. “The rules of wealth management warfare have changed significantly,” since Barclays were last involved, believes Mr Dovey. The new scramble for clients in Asia will be determined, no longer by just boots on the ground, but at least in part, by which bank has the best combination of bionic advisers, screens and data.
