The exit of Credit Suisse Group AG (CSGN.S) from the U.S private wealth business last year must have raised quite a few eyebrows. However, this was followed by a new investing banking group plan which was basically targeted and focused towards billionaires.
The bank has understood that there is a big potential when it comes to meeting the financial needs and requirements of billionaires. Keeping this in mind, it has hired the services of Charlie Buckley. He belongs to the UBS group which is a competitor for the bank and was handpicked by the founders and he would be working closely with them. This has been revealed from an internal communication with Reuters. It would be pertinent to mention that Buckley is no fresher and carries with him rich experience in UBS and his ability to strike a business cord with the rich and wealthy individuals and groups is well known.
There is a slightly different model which will be dished out to these wealthy individuals. Instead of taking care of the wealth planning needs as it the case conventionally, Charlie Buckley and this team will focus more on the asset business and the lending requirements of these ultra rich groups of people. The focus will be more on M&A advice, pure lending and advices and tips pertaining to capital markets. The focus will be mostly on rich individuals and families and they will also try and rope in business individuals and entities that are successful in the field of telecommunications, biotechnology and oil and gas. The stakes could be worth quite a few hundreds of millions of dollars.
The model that is being planned will be to enter into a working relationship with the CEO of a private technology company. As and when the entrepreneurs are ready to expand their business by going public or if they want to sell the business, this concern will introduce UBS to the CEO of such company. Charlie Buckley and his team will take the matter forward. The team will mostly be of individuals who take care of stock offering and M&A related matters. They are also looking into the market of buying annuities despite the strict regulations.
The latest move is a part of a well-thought out strategy by which Credit Suisse will not only bring down levels of trading businesses in U.S.A but also focus their energy on wealth management in Asia and other emerging economies around the world. The objectives and goals are quite clear. Credit Suisse will try and strengthen the investment bank and also the wealth management unit. This was a part of the plan which was decided in the strategic review meet held last October.
The objective of Credit Suisse is also to stop being in businesses which require big capital. It also is trying to be away from business which does not have the scale to be competitive. The U.S Wealth Management business is one such example. As a move to get things started in the right earnest, Wells Fargo & Co entered into an agreement with Credit Suisse to have the license to recruit brokers in U.S who are associated with the Zurich-based bank.
This new strategy is in line with an increasing trend to offer different types of financial and investment services to the ultra-rich. This segment is becoming one of the fastest growing segments of households. It would be pertinent to mention here that the United States tops the list of millionaire households. However, in terms of numbers the biggest chunk is expected to come from Asia and this has been confirmed by research studies of Boston Consulting Group.
This new effort has been possible because the bank has posted quality profit for the second quarter and this has strengthened the hands of Thiam’s in his effort to give a new direction and also to restructure the bank and its operations.