All articles by PBI Editorial
PBI Editorial
HMRC proposes new offshore inquiry
The UKs tax agency, HM Revenue & Customs, has written to some 170 private banks, brokerages and building societies with proposals for investigating offshore accounts held with them by UK residents.This fresh initiative follows a disappointing outcome to the UKs offshore disclosure facility, essentially a tax amnesty, conducted earlier this year
Barclays, HSBC and Credit Suisse joust for top honour
Barclays Wealth, Credit Suisse and HSBC Private Bank are the short-listed contenders for the key Private Banker International 2008 award: The Outstanding Global Private Bank for 2008.
Swiss private bank, US hedge firm merge
The two jointly will have more than $18 billion of assets under management in wealth management. Clients of Connecticut-based Fairfield will have access to wealth services offered by BBH, while the latters clients will have access to Fairfields hedge funds, funds of hedge funds, real estate funds and other products, the companies said. The two said their immediate aim is to increase the number of their private clients and to accelerate the growth of the private bank by enhancing its marketing and sales capabilities and adding to its personnel.
Asia’s family office numbers set to increase at double-digit pace
Private banks are well placed to benefit from double-digit growth in the Asian family office market in the coming years, according to a VP Bank survey. The number of formalised single family offices in Asia is likely to increase from 20 to around 250 by 2015, according to the study, carried out by Liechtenstein-based VP Bank and University of St Gallen, Switzerland.
Running out of alternatives
After several years of fine-tuning asset allocations to accommodate both an equities boom and the rise of alternative investments, 2007 somewhat inevitably saw shifts in HNW investment strategies, with safer assets such as cash and fixed income securities the beneficiaries.Allocations to alternative investments dipped in 2007, accounting for nine percent of HNWI assets compared with 10 percent in 2006 The World Wealth Report noted that this reduction may have been limited by the fact that some hedge funds which accounted for 30 percent of alternative investments froze client withdrawals in the latter half of the year in reaction to market difficulties.Investors also retrenched geographically in 2007, with most favouring the safe havens of domestic markets For Latin America and the Middle East, typically heavy investors in North American markets, this has led to a scaling back of such interest by nine and five percentage points respectively.Globally, HNWI allocations to North America fell from 43 percent in 2006 to 42 percent in 2007, a trend that is expected to deepen
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Competition heats up
Credit Suisse has just launched its wealth services as more large domestic rivals also enter the countrys projected $1 trillion wealth sector. Credit Suisse has officially unveiled its wealth management business in India, joining rivals like Citigroup, Morgan Stanley and Merrill Lynch in seeking out wealthy clients Credit Suisse (CS) is targeting individuals and family-owned businesses that have a net worth of at least $3 million, according to the banks India country head Mihir Doshi. CS, which already has investment banking and securities operations in India, plans to offer advisory services for domestic equity and debt staffed by as many as 40 wealth management staff by the end of 2008, he said.
Asia private banks triple business
Private banks in Asia have accumulated $600 billion in client assets under management between them, tripling their wealth business in the region over the last five years.The leading force remains UBS with an estimated $100 billion of client assets at the end of 2007, followed closely by Citigroup with $80 billion, according to an Asian private banking league table produced by Roman Scott, a regional wealth expert.But that $600 billion total, up from $200 billion five years earlier, underlines just how little classic Western private banking services have penetrated the high net worth markets in Asia
Crossing the pond
In a deal marking the first high-profile expansion of a US-registered investment advisory firm to Europe, Focus Financial Partners, the largest independent wealth management network in the country, is to buy a UK-based wealth adviser.The arrival in the UK of Focus Financial, with its finely marketed approach to fiduciary-based financial planning, marks a real turning point in the global registered investment advisory (RIA) market, and could open the door to a new wave of cross-border investment
UK hedge fund managers snapped up
With the addition of Marble Bar, EFGs total client assets relating to hedge funds will be in the region of CHF15 billion ($13.3 billion) or around 18 percent of total revenue-generating clients AuM.The latest transaction involves an initial consideration of $517 million in cash, with expected future payments in the region of $300 million to $800 million, subject to performance over six years
Benchmarking the wealth players
The US banks are trying to raise their game but seem to be falling behind. The European advisory model of private banking, as opposed to structures in wide use in the US and elsewhere that depend on transaction-based securities brokerage, continues to significantly outstrip its cross-Atlantic peers, based on a range of key performance indicators. European players as a whole continue to enjoy superior gross and pre-tax margins Indeed, with their full-service fee-based model, the European players are pulling away from their US rivals. For example, pure play Swiss bank EFG International posted a gross margin on assets under management (AuM) of a class-beating 123 basis points in the first-half of 2007 (albeit with a slower performance in the third quarter as the subprime crisis unnerved investors).