BNP-Fortis deal on hold…
BMO takes on AIG unit…
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Hedge funds worldwide lost $350bn in
2008…
Barclays Wealth’s sustained growth…
REGULATION
BNP-Fortis deal on hold
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By GlobalDataBNP Paribas’ deal to buy Fortis Bank, a transaction which had
been slated to form the Eurozone’s biggest private bank, has been
put on hold by Belgian regulators.
The French banking group announced it would not proceed with its
current plan to buy a stake in Fortis after the Brussels Court of
Appeal decided to suspend the transaction for 65 days. In a brief
statement on its website, BNP said that, given the Brussels court
ruling, the acquisition of a stake in Fortis “cannot proceed as
initially planned”, though it is now understood the deal will go
ahead.
The court on 12 December suspended the transaction after ruling
that Fortis shareholders be allowed a say in the breakup of the
bank and its takeover by BNP.
When the €14.5 billion ($19.2 billion) deal was announced in
October, BNP trumpeted that it would create the number one private
banking franchise in the Eurozone with €214 billion in assets under
management.
The merger has since become mired in intense political and
shareholder manoeuvrings in the Benelux nations over the wholesale
dismantling of the Fortis banking empire.
The controversy over the sale to BNP led to the fall of the
Belgian government of Yves Letermene, amid charges of meddling with
the legal processes. This administration was replaced at year-end
by a new coalition led by Herman Van Rompuy, who became the
country’s third prime minister in only a year.
MERGERS AND ACQUISITIONS
Macquarie offloads leveraged assets
Macquarie Bank has sold its margin lending portfolio to
Leveraged Equities, a subsidiary of Bendigo and Adelaide Bank, as
it looks to scale down its gearing.
But the Australian-based investment bank will continue to offer
its private clients Macquarie-branded margin lending through a
white-label agreement. Leveraged Equities agreed to acquire the
loan portfolio for a premium of A$52 million ($35.3 million), paid
in the form of short-dated convertible preference shares issued by
Bendigo and Adelaide Bank.
The sale is one of a number of balance sheet initiatives from
Macquarie to reduce funded assets by around A$15 billion to allow
the bank to focus on more profitable parts of its business. The
bank has A$239.2 billion in assets under management, though much of
this is asset management and institutional business.
MERGERS AND ACQUISITIONS
BMO takes on AIG unit
BMO Financial Group is strengthening its wealth management
offering with the C$375 million ($302.4 million) purchase of
American International Group’s Canadian life insurance
business.
The unit will allow the Canadian bank’s BMO Nesbitt Burns wealth
management business to improve its offering in investment and
tax-efficient insurance products. BMO Nesbitt Burns has 800
licensed life insurance agents.
“Our clients, especially those in or near retirement, are
looking for security and peace of mind,” said BMO CEO Bill Downe.
“Combined with our industry-leading advisers at BMO Nesbitt Burns,
we will now be able to provide clients with the investment and
tax-efficient insurance solutions they need to help them secure
their lifestyle and retirement needs.”
The AIG operations will be integrated with BMO’s existing
insurance business over the next 6 to 12 months. Nesbitt Burns had
74 branches and 1,400 investment advisers as of December 31.
RESULTS
Sarasin strengthens, issues bullish
statement
Bank Sarasin, the Swiss private bank majority-owned by Dutch
mutual Rabobank, has hired Peter Wild to strengthen its trading and
family office divisions.
A spokesman said the bank was not making public performance
targets for the family office business but has identified it as an
area with high potential for growth. Wild, the former AIG Private
Bank CEO, who was replaced by Eduardo Leemann in August, is to
joint the bank’s executive committee.
“Peter Wild is a well-known figure and a highly experienced
banker whose close familiarity with the market will be a valuable
asset and perfect complement to our existing management team,” said
Joachim H Straehle, CEO of Bank Sarasin.
Wild was a trainee trader at Banque Cantonal Vaudoise in
Lausanne, at Credit Suisse in Zurich and Julius Baer in New York.
Separately, in an interview with news agency Reuters, Straehle
reiterated a 2010 assets under management target of CHF100 billion
($89.3 billion) as the bank picks up clients from bigger rivals.
Sarasin had CHF81.9 billion as of June 2008.
Hedge funds
Hedge funds worldwide lost $350bn in 2008
Hedge funds lost $350 billion around the world in 2008, the
worst year yet for alternative investments. Around 90 percent of
the money was lost in the three months to the end of November,
according to hedge fund tracker Eurekahedge.
The hedge fund industry contracted by about a fifth to $1.5
trillion at the end of the year from a peak of $1.9 trillion,
Eurekahedge reported. Another estimate showed that hedge funds
overall fell 18.8 percent last year, the sharpest decline on
record.
Early estimates indicate the Credit Suisse/Tremont Hedge Fund
Index will finish up approximately 0.30 percent in December, based
on 74 percent of assets reporting, and so slightly moderating the
year’s decline.
The biggest falls were recorded in the emerging markets asset
style, off 30.4 last year, and in equity market neutral funds, down
39.4 percent.
Last year, by comparison, the MSCI World Index was 42.0 percent
lower, the Barclays Capital Aggregate Bond Index down 4.79 percent
and the DJ AIG Commodities Index down 35.65 percent.
FAMILY OFFICES
Guinness wants to be good for families
Iveagh Private Investment House, the family office established
to manage money for the Guinness brewery family, is looking for
more family clients after integrating its second family.
Iveagh head of portfolio management, Christopher Wyllie, said
the venture with the La Sella family had gone so well that Iveagh
is eager to add further clients, formally becoming a multi-family
office. But he stressed the clients would have to fit with “our
culture and ethos”.
Iveagh currently has around £400 million ($587 million) of funds
under management. That includes a fund based around its core
investment strategies, the Iveagh Wealth fund, launched last
September.
Meanwhile, GenSpring Family Offices, an affiliate of SunTrust
Banks, agreed to acquire Cymric Family Office Services of
California. Cymric was founded by the current CEO and President
Patricia M Soldano in 1987. The combined firm will have more than
$17 billion in assets under advisement. Terms of the transaction
were not disclosed.
CORRECTION
Barclays Wealth’s sustained growth
In last month’s Lehman Bros deal accelerates Barclays story, a
graph incorrectly showed profit before tax at Barclays Wealth
declined in the first half of 2008. The figure used in the chart
should have been £182 million, rather than the figure which was
used (£134 million). The correct interim figures for Barclays
Wealth from 2005 to 2008 are: H105, £76 million; H106, £119
million; H107, £173 million; H108, £182 million.
