Julius Baer expands private banking business in Germany – offices in Frankfurt, Duesseldorf, Hamburg and Stuttgart
"Germany is traditionally the key foreign market for Julius Baer, and we now also aim to strengthen our onshore private banking activities in this country. We have successfully done business with institutional investors in this market for a number of years and are a well-known provider of Swiss private banking services. Market presence and our strong brand form a solid foundation for steadily building up and expanding our onshore private banking business in Germany," explained Raymond J. Baer, Chairman of the Board of Directors of Julius Baer, to the press representatives in Frankfurt. "The launch of private banking activities in Germany represents another milestone in the implementation of our new strategic direction, which is firmly underscored by the recently announced acquisition of three renowned Swiss private banks."
By taking over the three private banks Ehinger & Armand von Ernst AG, Ferrier Lullin and Banco di Lugano, as well as GAM Holding, the Julius Baer Group will become the largest pure-play wealth manager in Switzerland. "These acquisitions will place our venerable company in an optimal strategic position to play an active role in the consolidation process among Swiss wealth managers and small private banks," further observed Baer. The acquisitions give Julius Baer a strong market position and geographic presence in the leading international financial centers.
Growth potential in Germany varies by region
The German market for high net worth private clients is the largest in Europe. "At present, there are approximately 750,000 wealthy individuals in Germany with investable assets exceeding half a million euros each," noted Gerhard Grebe, Member of the Board of Bank Julius Bär (Deutschland) AG, Frankfurt. The liquid assets of the wealthy Germans currently amount to around 550 billion euros. According to Grebe, the existing private wealth in Germany is fragmented and distributed unevenly across the country's regions, but is concentrated in the former states of West Germany, especially in Hamburg, North Rhine-Westphalia, Hesse, Baden-Wuerttemberg and Bavaria. For example, more than a third of the 100 wealthiest Germans live in North Rhine-Wesphalia, followed by Baden-Wuerttemberg and Hesse. A similarly uneven distribution is evident for high income earners in Germany.
Proximity to clients and lean structures in Germany
"The regional distribution of wealth therefore also had a decisive influence on the location selection process for the German private banking business of Julius Baer," commented Thomas Haas, Member of the Board of Julius Bär (Deutschland) AG and Head of Private Banking in Germany. According to Haas, the offices in Frankfurt, Stuttgart, Duesseldorf and Hamburg will in future offer customized investment advice and wealth management solutions to the German private banking clients. Customer care will be provided decentrally, by four relationship managers at each location, and CCB Bank has been chosen as a competent external partner for the IT-supported processing of back office transactions and banking administration. "In terms of taking a sensible and sustainable approach, apart from strict cost controlling and a focus on profitability, the synergies that present themselves within the Julius Baer Group will be key factors in enabling us to operate profitably in the market and allowing us to simultaneously offer clients a comprehensive and independent service and product range," noted Haas. In the investment advisory area, clients will have the benefit of an open product architecture, including products from both the Julius Baer Group and external providers, as well as individually structured investment plans. Private banking clients will thus be able to invest in individually tailored fund mandates or add to their portfolio through products from the extensive offerings from Julius Baer Asset Management. In the case of wealth management mandates, upon request and consultation Julius Baer will take over responsibility for the entire investment process. The offerings in the wealth management area comprise classic private banking services such as financial planning, advice on safeguarding family wealth across generations as well as supplementary advisory services like optimizing real estate holdings, optimal insurance solutions and the coordination of multiple portfolios.
Expansion of asset management product range
In the field of asset management, Julius Baer has already built up a strong market presence in Germany in just a few years. The company is distinguished by a broadly based product range as well as comprehensive advisory services focusing on optimization in the structuring of banking and insurance assets with the aide of special funds set up for this purpose. "Clients may currently make use of approximately 70 Julius Baer products in the form of public funds, private label funds and absolute return funds as well as hedge fund and certificate solutions," said Alexander Gerstadt, Member of the Board of Julius Bär (Deutschland) AG. These are all managed according to an active investment approach. The focus of the business in Germany is on counseling institutional investors like umbrella funds, asset managers and banks. Union Investment has successfully served as a strategic partner in Germany for several years now. Thanks to the acquisition of GAM, the product range in the alternative investments area will in future be significantly expanded for German clients.
This announcement is not an offer for sale of securities. The securities have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act. There will be no public offering in the United States. No securities will be registered under applicable securities laws of any state or jurisdiction of Australia, Canada or Japan and, subject to certain exceptions, no such securities may be offered or sold within Australia, Canada or Japan or to or for the benefit of any national, resident or citizen of Australia, Canada or Japan.