a-private-bank-with-its-own-perfume

A private bank with its own perfume

Asia chief of Banque Piguet, Michael Chan, talks about the Swiss private bank's strategy for growth and why China will be crucial to its future.
Banque Piguet & Cie (BPSA) is new to Asia. Can you explain a little of the firmÆs background?
We are a member of the BCV Group (Banque Cantonale Vaudoise); which is SwitzerlandÆs fourth largest bank and is 67.9% owned by the Canton of Vaud. The group manages about $66 billion and has 70 branches, over 600,000 customers and a single A rating. The headquarters is in Lausanne.

BPSA was founded in 1856, and is 83% owned by the BCV Group, which is substantially state-owned. (It is the only big bank in Switzerland with a substantial state shareholder). We have offices in Geneva, Lausanne, Lugano and Yverdon. We officially opened in Hong Kong on March 8, and just got a license in Dubai.

One of the interesting aspects of our history is the story of Robert Piguet. He is one of the brothers of the family that originally founded the bank. He went into fashion and perfume before the Second World War, and actually taught Givenchy and Christian Dior. There is even a Piguet perfume that we gave out to clients; and it will become available in Lane Crawford in Hong Kong.

BPSA specialises in fund management and private banking.

What are the plans for Asia?
We are working towards building a team of up to 10 people. We are eyeing the mainland Chinese market and QDII. We are talking to a number of parties to hopefully be their offshore fund manager.

Interestingly the first overseas branch of the bank is in Hong Kong û not in London or New York. Our plans are very much in greater China, but with Hong Kong being a financial hub we hope to attract clients from across the region, including Southeast Asia.

What is your background?
I am a UK-qualified chartered accountant, and I was with Jardine Fleming for 10 years, and then with the private equity firm, Lombard. For the last five years I was based in Beijing, as managing director of an M&A advisory firm. I took up this appointment last September, and my first task was to apply for our bankÆs Hong Kong representative office license.

So your background isnÆt in private banking?
No, but it is in the finance industry.

What is the goal for assets under management?
We have just landed, and it is hard to say. QDII has just begun, and is moving from fixed income to H shares, and may next move to SFC-approved funds in Hong Kong. So the amount of money potentially coming out is very large, but it is hard to estimate. We think it could be quite phenomenal.

There are a lot of private banks in Asia today. What makes Banque Piguet û which is much less well known than say, UBS û think it can make any impact?
There are a number of factors that will distinguish us. Of the big four Swiss banks we are the only one with a substantial state shareholder. This means a lot in mainland China, as it implies security. Also our funds performance has been very respectable. Over the last 10-15 years it has averaged 8-12%.

Thirdly, in the greater China scenario it is an open playing field. Everyone is going in at the same time, and we have been around for 150 years û just that it is our first time in Asia. Fourth, we only do traditional Swiss banking, and do not manage funds in Hong Kong or elsewhere. For example, some Hong Kong Chinese clients would insist that their funds be managed in Switzerland. All our fund managers are based in Geneva.

Does that not create timezone problems, if the client wants to trade real time out of Singapore or Hong Kong?
We are a private bank and do not trade. We manage funds for the medium and long term. We seek capital preservation and a consistent rate of return. We are not a broker. We are a discretionary manager of funds. Most of our clients are investing for the medium to long term.

But isnÆt it true that most Asian clients are quite hands-on and have preferred advisory to discretionary portfolio management?
There is a client segmentation here. If you have $10 billion, you could speculate with $8 billion, and buy property and do your own stock portfolio û but the $2 billion should be placed with a bank like ours where capital preservation is paramount and we have a consistent rate of return.

So with your discretionary portfolio you would be telling the client, this is your æsafeÆ money and you should aim to get a 7% return, for example.
Our average for the last 10-15 years has been 8% to 12%. We are talking about this type of consistent rate of return.

Private banks are all adding staff in Asia and growing. But there are too few private bankers. You are another new entrant. WonÆt it be hard to find good people to help you grow this business?
It is not easy. We are looking for people from mainland China with financial knowledge. We are gradually finding people and it probably helps that I spent my last 5 years in Beijing. China has a lot of good people in the finance industry. The mainland Chinese market is the biggest untapped market, and will be the largest part of our staff.

It will be a gradual process of growth. I am not denying that. But we have been managing money in Europe for 150 years, and have worked with up to six generations in the case of some families. We are here for the long haul. And cost-wise versus the potential, we feel it is really worth growing the business at this particular junction.
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