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Credit Suisse Group AG's (CS, CSGN.VX) Private Banking Americas unit is on track to boost its relationship manager headcount by roughly 20% over the next three to four years and is weighing new office openings in the U.S. as part of a continuing push to capture more business from the richest of the rich.
The unit of the Swiss bank, which focuses on clients with $10 million or more in investable assets, has 570 relationship managers, or RMs, the firm's name for financial advisers, in the region, 420 of which are in the U.S., and has more than doubled its total here over a seven-year period.
Credit Suisse, whose RMs in the Americas generate more than $2 million in fees and commissions, generally recruits about 75 to 100 advisers a year, including business school students, who are considered rookies.
In an interview, Anthony DeChellis, Chief Executive of Credit Suisse Private Banking Americas, said the firm "is highly selective in the hiring of RMs," adding that this "creates a higher franchise value for the advisers" in the region.
Credit Suisse, which has 15 offices in the U.S. and 30 in the Americas, plans to increase its presence in Southern California and is considering opening new locations in Washington, D.C. and in Phoenix. Beyond the U.S, the Credit Suisse business also serves wealthy clients in Latin America.
While the firm tries to avoid the pricey recruiting battles often waged by its larger competitors, Credit Suisse capitalized on a shifting landscape at those rivals during the financial crisis, adding several high-producing advisers in 2008 and 2009.
The business, which began an aggressive build-up with DeChellis' arrival six years ago, is much smaller in the Americas than major brokerages such as Bank of America Corp.'s (BAC) Merrill Lynch Wealth Management and UBS Wealth Management Americas, a unit of UBS AG (UBS, UBSN.VX), Credit Suisse's hometown rival, which each have thousands of financial advisers.
Yet Credit Suisse still gathered $4.7 billion in net new assets in the first quarter, up 42% from $3 billion a year ago. The quarterly figure is slightly higher than the amount posted by UBS' U.S. brokerage operations, which added $4.6 in net new money. UBS though, has been a more aggressive recruiter, which contributed to much of its inflows during the period. UBS now has 7,015 advisers to wealthy clients.
Overall, Credit Suisse has $168 billion in assets under management in the Americas, up 10% from $153 billion, a year earlier. By contrast, UBS has $851 billion in total client assets.
DeChellis said he's confident the Credit Suisse unit can eventually reach $230 billion in assets under management within the next three years.
Credit Suisse has gained traction in managing money for so-called ultra-high-net worth clients in the Americas, in part, due to the efforts of a small group of less than a dozen professionals within the private bank, many of whom have backgrounds in investment banking and capital markets.
Since its launch in the U.S. in 2009, the group, called Solution Partners USA, has helped Credit Suisse close more than 85 large transactions with over 50 wealthy clients of its private bank whose net worth ranged from $400 million to $15 billion. The transactions included mergers and acquisitions deals that were considered too small for Credit Suisse's investment bank, but met the needs of the private bank's rich clients.
The solution partners business, led by co-heads Manuel Bellod and Michael Stoddard, veterans of banks including Donaldson, Lufkin & Jenrette and UBS, respectively, has 92 employees globally and nine in the Americas.
Bellod said, on average, 20% of U.S. relationship managers typically work with the Solution Partners professionals, though he stressed that any transactions are conducted through the RMs.
Alois Pirker, a research director at Aite Group, said the group is complementary for Credit Suisse, adding that it can serve as a "link between investment banking and wealthy clients" and allows the firm to bridge the gap between the two business lines.
-By Brett Philbin, Dow Jones Newswires; 212-416-2173; [email protected]