The Swiss private bank is buying a wealth manager with 17 billion Brazilian real in assets. How does Julius Baer stack up to Swiss giants UBS and Credit Suisse following the deal?
The Zurich-based bank said it will splash out for Reliance, a Sao Paulo-based wealth manager owned and run by 13 partners. The firm is profitable on its 17 billion Brazilian reals (5 billion Swiss francs) under management, Julius Baer said. The bank expects a modest single-digit profit contribution from Reliance after the acquisition closes in the second quarter of 2018.
While Julius Baer didn't disclose the purchase price, the bank said the deal will only dent its capital base by less than 50 basis points. Reliance's partners will stay on board and run the firm in coordination with the Swiss owners.
Striking Distance
The deal vaults Julius Baer well ahead of UBS in Brazil, and into the same territory that Credit Suisse occupies. Under former CEO Boris Collardi, Julius Baer snapped up GPS Investimentos, the country's largest independent wealth manager, seven years ago. Together with GPS' 8 billion francs, in assets and the Reliance deal, Julius Baer will manage 13 billion francs in Brazil.
By contrast, UBS as the world's largest private bank is still struggling with the vestiges of the 2008/09 financial crisis, when it was forced to offload Banco Pactual. Today, UBS manages just 2.3 billion francs in the country. Credit Suisse, which has had a far steadier presence in Brazil, oversees 28 billion francs.
Julius Baer didn't immediately disclose how it would fold Reliance into GPS or into the wider bank, saying it would decide later. «This transaction guarantees continuity for our independent wealth management model offered to our clients,» Reliance co-founder Marcelo Steuer said.
