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Vontobel’s asset management is riding on a wave of success with Axel Schwarzer in charge. What’s holding him back in his job is a dearth of potential takeover targets and the attitudes prevailing at many pension funds, he said in an interview with finews.com.

The success of its asset management has contributed to Vontobel’s decision to turn itself into a pure investment firm.

Yes. Before the change though there was a strong commitment, which Vontobel had stuck to for years. Asset management didn’t become the driving force of Vontobel overnight. We developed the business step-by-step and the core belief was: we want quality. That’s the only way to be competitive on a global scale.
It never was our ambition to distribute our products only through our own wealth management. Right from the start, we wanted to be seen as a competitive asset manager.  We can proudly say that our fund distribution isn’t dependent on Vontobel’s wealth management.

In the first half of 2019, you had a drop in profit. Has the upward trend been halted?

I can’t give you any figures, but from my point of view the upward trend is unbroken. Our update from December 9 made this plain.

«We need to keep salaries in line with global standards»

It is true that we had a slight drop in profit from the first half of 2018. But assets under management rose. And you can take it from me that this will be reflected in the profit for 2019.

Personnel cost were a main factor behind the drop. Was this a reflection of the higher bonuses you are paying your portfolio managers?

Yes – we have hired a lot of new staff. But the salary policy is relevant. The asset management of Vontobel does not have to shun any comparison in a global perspective. Quite the opposite, as dozens of awards this year alone can prove. Therefore we need to keep salaries in line with global standards.

Is the salary policy a way to lure top fund managers to the not-so-well-known Swiss asset management?

As you know, one of my top priorities is to strengthen the Swiss asset management. If you are serious about it and want to attract top portfolio managers, you must pay appropriate salaries.

«Most big asset managers are dominated by the distribution»

If you look at our growth, it isn’t arising out of nowhere, but is down to the quality of products and to the people sought after globally, who make this quality happen. For this, I gladly pay the going price.

In respect to volume, Vontobel isn’t among the top in Switzerland. So apart from the salary, what is it that makes a top fund manager join Vontobel?

It isn’t about size, it’s about quality. Despite the size, fund managers enjoy a global perspective and the necessary freedom, also in the conception and implementation of the investment process. At big asset managers, portfolio managers often are restricted by a tight regime that is the consequence of the benchmark focus – the investment opinion, CIO offices and committees, which dictate the typically low-risk strategy. And most big asset managers are dominated by the distribution. That is not particularly attractive for many portfolio managers.

But Vontobel did also grow because of the heavy expansion of distribution.