Julius Baer boss Boris Collardi deployed a bit of subterfuge in his newest restructuring of the Swiss private bank. His motivation for the changes was entirely different from the one that the bank disclosed publicly.
Just two weeks ago, Julius Baer was riding high in Switzerland: it had just stolen a march on local rival Valiant by poaching 11 client advisors, which finews.ch revealed exclusively. The bank also installed four new regional heads, in a bid to fuel further growth, according to then-Swiss head Barend Fruithof.
Baer CEO Boris Collardi's newest restructuring, disclosed this week and effective in September, is all the more remarkable in view of the recent Swiss coup. The move is purportedly to strengthen Julius Baer’s client focus and to improve efficiency – two things that should have already been fulfilled long ago by the bank.
Endless Management Platitudes
Julius Baer’s management jargon seems to be an endless source of platitudes. A closer look also reveals that the bank’s full-bodied announcements aren’t the result of a long evaluation process based on the situation’s merits. Instead they seem to be largely opportunistic in nature.
The newest reorganization is merely a redistribution of duties to other executives – an exercise which Collardi (pictured above) seems to have long had a flair for.
Public Policy, Red-Light Escapades
Collardi is known for his rapid hiring and promoting of executives. Prominent recent examples include installing the former head of Economiesuisse Pascal Gentinetta two years ago.
Gentinetta, who had the misfortune of presiding over the business lobby at a time when the political climate in Switzerland swung firmly against the business establishment in several key popular votes, is now Baer’s head of public policy.
Another example is Bernard Kobler, the former CEO of Lucerne’s cantonal bank, whose reputation in conservative central Switzerland was in tatters after a series of embarrassing revelations involving a prostitute who eventually bore him a child out of wedlock.
Bonzon for Varnholt
Collardi hired Kobler as head of Julius Baer’s Lucerne office last year – at least until the reshuffle under Fruithof two weeks ago, which cost him his job.
Another staff move which raised eyebrows was when Collardi seized the opportunity to hire renowned investment expert Yves Bonzon early this year. He did so, knowing it would displace Burkhard Varnholt, Baer’s existing investment guru. Varnholt packed up at Baer and returned to his previous employer, Credit Suisse, several months later.
Unfulfilled Career
The rapid pace of Collardi’s staff moves was also felt in Asia, when Tom Meier, Baer’s head in the region, was ordered back to headquarters. The move happened far faster than Meier or anyone had expected – namely, because Collardi quickly installed Jimmy Lee in his place.
Meier is now in an awkward holding pattern as a non-executive chairman of Baer and – remarkably for observers of Baer – wasn’t called on in Collardi’s newest reshuffle.
The subterfuge of names, changes, and responsibilities that Baer disclosed on Tuesday serve one purpose: to dispense of Barend Fruithof (pictured below).
The much-lauded former Credit Suisse executive instantly became the bank’s great white hope when he was hired in a surprise move last year to fuel growth at Baer’s Swiss unit.
No Secret
Fruithof, an opinionated and decisive banker with few airs and a multi-facetted career, didn’t hesitate to act. He also didn't shy away from addressing taboos in the bank: he made even Baer’s successful client advisors understand that he expected them to deliver more.
Fruithof also disposed of «underperformers» and reinforced the Swiss bank with fresh blood. Never one to make a secret of his professional feelings, he told finews.ch in perfect clarity that he expected Baer to «crank it up a notch» (full version of interview in German, excerpt is available in English).
Nothing by Halves
Apparently Fruithof’s efforts were a step too far for Baer’s seasoned executives, who didn’t like being challenged by an «outsider» to the bank who had never worked as a private banker in his career. Thus began the attack on Fruithof.
The rest is history: it became clear to Collardi that he couldn't defend his Swiss boss any longer, but he didn't want to lose Fruithof altogether. The CEO transferred responsibility for Switzerland to Gian A. Rossi, a longtime close Collardi associate who has survived several reshuffles.
Collardi decided to offer Fruithof a new job as head of external asset managers – a considerable step down. Never one to do anything by halves, Fruithof drew the consequences and will leave Baer shortly, as the bank disclosed on Tuesday.
CEO in the Hot Seat?
Boris and Barend never became cozy, even if their mutual admiration is apparent. Fruithof’s purposeful approach didn't just lead to a new staff dynamic at Baer, it also raised his profile as a potential CEO successor.
Collardi is under pressure on various fronts – scandals involving the world’s soccer body FIFA and Brazilian Petrobras, stagnant net new money, feeble business in Switzerland, poor financial markets, a historically strong Swiss franc and Britain’s exit from the European Union which is set to roil the finance sector for at least 18 months.
Is Collardi in the hot seat? Fruithof would have been the natural choice to inherit the CEO position. This week’s restructuring puts an untimely end to that, as well as hampering comparisons to Baer’s year-ago financial results.
