Credit Suisse Continues Americas Buildup, Plans More Office Openings
May 04 2012 - 8:04AM
Dow Jones News
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;
brett.philbin@dowjones.com
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