Lombard Odier to grow in Brazil without acquisitions
| Data de publicação | 23 Abril 2024 |
With $351 billion in wealth management globally, Swiss private banking firm Lombard Odier wants to grow in Brazil with no acquisitions. All foreign groups that achieved a relevant share in this segment took shortcuts through acquisitions. That was the case with Credit Suisse, now owned by UBS, and Julius Baer Family Office
Frédéric Rochat, a partner and executive at the bank since 2012, explained that the current group is the outcome of the 2000 merger between two centuries-old family-held financial institutions: Lombard Odier and Darier Hentsch. No other consolidation movement has been taken since then and the group has grown organically. The same logic will prevail in Brazil, where the private banking firm opened its office in 2020, during the COVID-19 pandemic
"[Organic growth] is at the heart of Lombard Odier’s model. We are not listed [on the stock exchange], we are a privately held firm structured as a partnership. That is the best quality growth we want to achieve, always organically," said Mr. Rochat, who spoke with Valor at the firm’s local office during a recent visit to Brazil. "Critics will say it is too slow, that it would be better to make acquisitions. We say yes, it is slower, you need to be patient, but it allows us to build lasting quality in the way we develop the customer base and the team. We can handpick our customers, and new team members, and integrate them into our culture."
According to Mr. Rochat, the wealth management industry, not only in Brazil but also in Europe and worldwide, is going through ramifications. "We see wealth management players becoming bigger and bigger, going through strong consolidation. We take a different approach. We like to keep it human size."
The executive points out that $351 billion in investor funds is a small amount compared to the size of large financial groups—UBS and CS combined total some $4 trillion. But Lombard’s size, according to Mr. Rochat, allows the firm to get to know every customer "individually and personally." Financial conglomerates tend towards standardization, he says, which is why the plan is to continue as a privately-held boutique
"Going public would be good for acquisitions, to increase equity. But that could bring natural tension, with short-term pressures to report the best results for shareholders versus the long-term interest of customers," Mr. Rochat explains. "Due to these pressures, many large banks view the wealth management business as a product distribution...
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