Wealth bulletin leaders 2008: Readers pick their top managers
More than 3,000 votes were cast in our online survey to find Europe’s wealth management industry leaders of 2008 for Wealth Bulletin. Voting took place during October and November, with short lists of 10 candidates in th polree categories: business leader, investment management and client service. Wealth Bulletin profiles the winners.
• Business leader
Daniel Truchi
Daniel Truchi, chief executive of SG Private Banking and voted Wealth Bulletin’s business leader of 2008, said it has been the most challenging year of his banking career.
He said: “The industry has been hit by one tsunami after another. Who knows where the next one will come from or when it will arrive?”
Yet SG has weathered the storm and its private bank has flourished. In the nine months to the end of September it saw net new money inflows of €4.2bn with profits only slightly behind its performance of 2007.
However, Truchi is critical of how the wealth management industry as a whole has navigated the financial crisis. He said: “Clients have not been served properly by a number of banks.” He suggested trust had been eroded.
Truchi expects this to result in a period of consolidation. He said: “A lot of private banks will disappear or merge, both small and large.”
Having taken SG’s private banking assets to €73bn last year with the help of three small acquisitions – Canadian Wealth Management, ABN Amro’s private bank in the UK, and a 37% stake in Rockefeller & Co, a US multi-family office – Truchi said his goal this year is to land a much bigger fish.
“Our strategy is to continue to move up the ranks of private banks worldwide. To hit that target we need to look for a significant acquisition and are looking at options that would potentially transform the private bank.”
He said SG would launch a multi-family office business in Europe in partnership with Rockefeller. Despite clients’ dissatisfaction with the performance of many big private banks he does not see independent multi-family offices and boutiques enjoying a boom.
He said: “The Madoff scandal has shown the limits of the family office and independent multi-family office model. A lot of clients were advised to invest in Madoff by family offices that didn’t have the resources to do proper due diligence on the funds. SG’s due diligence allowed us to avoid direct exposure to the Madoff funds.”
With cash making up almost 50% of SG’s clients’ portfolios, Truchi said the bank was developing strategies to take advantage of market opportunities while giving clients the comfort they crave in the wake of hefty losses.
He said: “We are preparing a number of investment solutions that will offer some form of downside protection,” with commodities, equities and real estate the three asset classes the bank is concentrating on.
Runners-up
Ivan Pictet
Ivan Pictet, managing partner of Pictet & Cie, narrowly missed out being named European business leader in the Wealth Bulletin online vote.
He is leader of Swiss private bank partnership Pictet, which is strongly positioned in wealth, asset management and private client custody. Since the start of 2007, when the credit crunch began, the firm has grown its total assets from Sfr234bn to Sfr245bn in September. Its staff numbers have risen from 2,200 to 2,890.
Members of the Pictet family have served the bank over eight generations. However, the managing partner can only be a Pictet if non-family partners agree. Ivan Pictet has both legitimacy and ability. The combination is potent in Swiss private banking circles. Pictet is also a veteran networker.
Pictet has benefited by refusing to recommend funds run by alleged fraudster Bernard Madoff. It did not use Lehman Brothers as a counterparty out of mistrust for covenants in the securities industry. Troubled investment banks often warn that private banks run into trouble if partners run into trouble. Pictet has dealt with this issue by saying they can only commit to loans with the approval of their peers.
Peter Flavel
Peter Flavel, chief executive of Standard Chartered Private Bank and third in the online vote for business leaders, believes wealth managers’ offerings have become increasingly commoditised. He said: “While clients used to select products based on branded private banks, the recent crisis has destroyed a lot of brand value of branded private banks.”
He thinks private clients will increasingly look for offerings tailored to their demographics and background. His bank has responded by offering the world’s first programme for Korean expatriates. Flavel believes Standard Chartered’s presence in the big emerging market economies will underpin the private bank’s growth in the difficult years ahead.
He said: “In the near future, it is important to have onshore presence in many of the emerging markets, for example India, China, Korea, Taiwan, to tap in this growth.”
• Investment managers
Nicolas Sarkis
Investors should monitor corporate debt markets for signs of recovery before being tempted back into equities, according to Nicolas Sarkis, founder of AlphaOne Partners and Wealth Bulletin’s investment management leader of 2008. He said: “The first area to benefit from a slow return of investor risk appetite will be corporate credit.
“Unless we first see a sustained improvement in corporate credit, I do not see how stocks can initiate another trend upwards.”
Sarkis set up AlphaOne in 2006 to advise ultra-wealthy families and foundations, following a career as a wealth adviser at Goldman Sachs.
For investors considering taking risk again, Sarkis believes the best areas to look at are those that avoid the volatility of securities that are marked to market daily. He said: “Secondary private equity programmes are interesting because many limited partners are cash-strapped and are prepared to sell their commitments at meaningful discounts.
“In the marketable securities arena, I think US inflation-linked treasuries and investment-grade bonds present compelling value.”
Hedge funds, however, are another matter. He said: “Ultra-high net worth individuals will have trouble believing again in the hedge fund fairytale. I thought that before Madoff and even more so now.”
Runners-up
Gary Dugan
Gary Dugan, chief investment officer of Merrill Lynch Global Wealth Management in Europe, the Middle East and Africa, does not believe there will be a recovery in the world’s financial markets soon.
“We are seeing nothing to suggest a rebound in 2010,” said the former Barclays Wealth investment specialist, who came second in Wealth Bulletin’s investment management vote.
Dugan said reluctance to invest had reached such heights that many clients are keeping gold bars in their safes at home.
François Lhabitant
François Lhabitant, the 41-year-old chief investment officer of Kedge Capital, comes up a lot as a rising star in European wealth management and scored well in the investment management category of the Wealth Bulletin’s leaders survey. A former UBS and Union Bancaire Privée private banker, Lhabitant works for the Bertarelli family office, one of Switzerland’s best-known wealthy families.
• Client services and advice
Gerard Aquilina
Gerard Aquilina, head of international private banking at Barclays Wealth and voted Wealth Bulletin’s leader in client services and advice, is in no doubt the wealth management industry is facing a crisis of confidence.
While he believes clients are justifiably skittish given the numerous crises in the financial services industry, he suggested part of the problem is their advisers are equally uncertain. He said: “Clients feel it when their advisers are troubled. Perhaps it is time for private bankers to rediscover their sense of confidence.”
Aquilina, a Canadian, joined Barclays Wealth two years ago, having headed private banking in the Americas for HSBC. Speaking from Buenos Aires, he said he has seen the same sense of fear and uncertainty in clients be they in Mumbai, Milan or New York.
“I have not met anybody for some time who was looking at opportunities. The more bold, entrepreneurial clients will recognise that conceptually there should be great opportunities but, right now, no one is in the mood.”
With interest rates approaching zero in the US and at historic lows in Europe and elsewhere, he said clients might consider moving from cash to other assets as long as their advisers can give them the confidence to do so. Much depends on trust, which is a personal not a financial matter. He said: “A private banker is managing a relationship rather than money. If anything, there has been too much focus on the latter.”
Runners-up
Fritz Kaiser
Five years ago, at the World Economic Forum in Davos, Fritz Kaiser, executive chairman of Kaiser Ritter Partners, launched the Private Wealth Council, a group of ultra-high net worth families and individuals keen to explore the idea of responsible wealth ownership.
Since then, Kaiser has been working towards developing a framework for responsible investing for wealth owners defined by the maxim: make money while doing good. Kaiser is a wealthy man in his own right, having owned the Diners Club credit card business in Switzerland and Liechtenstein in the 1990s and been part-owner of the Sauber Formula 1 motor racing team.
His success was founded on advising sports stars on their financial affairs and he remains chairman of Liechtenstein-based wealth adviser Kaiser Ritter Partners. He is also a driving force behind moves to transform the principality from a tax haven to a tax-compliant wealth management centre. A profile of Kaiser will appear in the February 23 issue of the Wealth Bulletin supplement with Financial News.
Karina Challons
There is never a better time to plan for your future, according to Karina Challons, a director in the tax and law unit at HSBC Private Bank in London. She said: “This year might not be the greatest year to make money, but it’s a great year to make planning your financial future.”
Challons has a reputation as one of the top private client advisers in wealth management and only marginally missed out on second place in the survey.
Truchi 
Sarkis 
Aquilina
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