Swiss private bank proves partnerships move with the times
Geneva-based Mirabaud & Cie, established in 1819, is out to show that Swiss private bank partnerships can move with the times, while retaining an air of exclusivity.
Client assets have grown in each of the past 15 years, stepping up to 15% a year over the past 10. Last year, they rose nearly 14% to Sfr25bn (€15.5bn).
The bank opened an office in Dubai last year, to serve the Middle East and India. Its institutional business, including broking services, is thriving.
Yves Mirabaud, managing partner, said the bank began its renaissance in 1995: “That year, the partners, meeting in Lausanne, received a presentation from professionals working in the bank. We decided to change our management structure and the way we did business. We wanted to create a ‘machine’, a working tool that would sustain the growth of the group.”
Mirabaud has grown its workforce in Geneva from 60 to 90 since 1993. Across the world, group employees have risen from 250 to 500. The overhaul culminated in the bank’s move to a new headquarters on the Boulevard Georges-Favon.
Mirabaud has resisted blanket advertising, preferring to reinforce its exclusive image by sponsoring sailing and classical music events. Shades of blue, and strangely-shaped glass objects designed to illustrate harmony, figure strongly in its corporate literature.
The proportion of clients handled by partners has fallen from 85% to 90% of the total to 30% to 35% since 1995, with 40 additional wealth advisers hired since 1995.
Recruits knew the strength of the Mirabaud brand and its access to investment expertise. But advisers were also attracted by its “business-to-business” ethos.
Through this, individuals bringing books of business to the Mirabaud machine collect base pay and performance-related bonuses. The variable part of their remuneration is equivalent to a percentage of assets managed by each relationship manager. A book of business worth Sfr100m, for example, could lead to a payment equivalent to 0.1% of the total. The percentage goes up as new assets are added, assuming profit targets are met.
“Our advisers effectively become ‘shareholders’ in their own business,” said Yves Mirabaud. Individual advisers can in some cases retain a custodian of their choice. The bank also employs advisers who assist the partners with their client work. Some of them run their own books of business on the side.
“Generally, our recruitment comes in waves,” said Mirabaud. “We were very busy up until 18 months ago, then it went quiet in order to integrate the new entrants. Over the last two months, things have stepped up again.”
The troubles at larger rivals such as UBS are fuelling the recruitment market, but Mirabaud stressed interest in joining his bank has come from a broad range of institutions.
Private bankers are generally dismayed by events at UBS. But their impact is bitter-sweet from Mirabaud’s point of view, given that advisers and clients know partners with unlimited liability are renowned for avoiding the risks taken by large investment banks.
For large loans, Mirabaud refers clients to bankers at Credit Suisse, Fortis and Société Générale and it may shortly establish a relationship with a large bank in the Middle East. Mirabaud employs one adviser in Dubai and expects to hire four more in the near future.
To assist advisers, Mirabaud employs a clutch of star managers, such as Philip Watson and Jeremy Lodwick in its London office and Swiss equities manager Urs Heinimann. Marco Bruzzo in Paris manages French and European equities. In Asia, the bank works with Lloyd George Management, a $18bn (€11.6bn) fund manager of which it owns 4% and in the US it is close to Edgewood Management, which has $8bn under management.
Mirabaud was among the first private banks to develop expertise in hedge fund investing and was an early backer of George Soros’s Quantum fund in the 1980s. Clients have an average 35% exposure to hedge funds, which is high by industry standards.
The bank runs its own single and multi-strategy hedge funds under the MirAlt brand while Haussman Holdings and Asian Capital Holdings are among the 150 external alternative funds it invests in. It also researches the universe of 16,000 long-only and alternative funds to bring its clients the cream of the crop.
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