* Looking at boutique wealth management opportunities
* Falcon prefers boutique firms with $500mln-$4bln AUM
* Says has had net inflows of $870 mln in 2012
* Falcon is owned by Abu Dhabi fund Aabar
By Dinesh Nair
DUBAI, Dec 10 Falcon Private Bank, the Abu
Dhabi-owned entity which bought the London unit of Clariden Leu,
is eyeing more acquisitions in the boutique wealth management
sector as the industry consolidates to cut costs, a top
executive said on Monday.
Zurich-based Falcon agreed to buy the Clariden Leu business
from Credit Suisse in October, including some 2
billion Swiss francs ($2.1 billion) in assets.
Falcon, which has around $12 billion in assets, is
evaluating more such opportunities, Chief Investment Officer
David Pinkerton said on a conference call, while adding there
was no time frame to do a deal.
"We have a process underway to evaluate opportunities but we
are also cognizant of the fact that you need to integrate these
acquisitions efficiently to succeed. There is no pressure on us
to do a deal next year," Pinkerton said.
Consolidation in the wealth management industry has been a
major theme in the banking sector since the 2008 financial
crisis, as an increase in costs and regulation puts intense
pressure on profit margins.
Among larger players, Swiss private bank Julius Baer
agreed to buy Bank of America Merrill Lynch's
overseas wealth management business in August for up to 860
million Swiss francs ($920 million), expanding into emerging
Pinkerton said the bank's focus was to grow in emerging
markets where wealth is expanding at a faster pace than
developed regions and competition is less intense.
Falcon would look at buying wealth management boutiques
which manage between $500 million and $4 billion in assets, he
said, adding firms which share similar customer bases were
preferred acquisition targets.
"There is increasing cost on the regulatory side, system
side, so small wealth management boutiques with a billion
dollars of AUM (assets under management) are finding it very
difficult to cover their costs and survive independently," he
"Obviously, these targets would have to add some value and
synergies to our existing geographic and customer base. We don't
see ourselves doing a deal in the United States for instance."
Falcon is owned by Abu Dhabi fund Aabar Investments, which
in turn is majority-owned by International Petroleum Investment
Company, a quasi-sovereign entity controlled by the Abu Dhabi
government. Falcon was the private banking unit of American
International Group (AIG) before Aabar bought it in April 2009.
The bank has had net inflows of $870 million so far in 2012,
with the Middle East accounting for about $245 million of the
total, Pinkerton said.
Within emerging markets, the bank sees more opportunities on
the fixed income side, the executive said, adding he expects
equity markets in the Gulf Arab region to stay off the
investment radar of global investors in the coming year.
($1 = 0.9344 Swiss francs)
(Reporting by Dinesh Nair; Editing by Mark Potter)