Danske Bank’s asset management has gradually increased its business in Switzerland over the past one-and-a-half years. Now the Danes are mulling their next big step.

The biggest Danish bank, Danske Bank, is making a major effort to establish the asset management business in Switzerland, one of its focus markets. The main asset of the crew headed by Marc Homsy, head of asset management distribution Germany, is the Danish mortgage bond fund. The bank is the biggest seller of such papers, products that have a comparatively low, but secure yield.

They are an attractive proposition for clients in Switzerland – with pension funds and insurance companies featuring prominently. The Danish covered bond market is the biggest in the world.

Swiss Investment Behavior

«If you want to do business with the large Swiss players, you need to have products of a certain volume and with a track record,» said Homsy in an interview with finews.com. «In the mortgage bond funds we manage more than 25 billion euros and are the biggest provider in the market.»

In Switzerland, Danske Bank Asset Management is a small player. Internationally, the asset management division has 110 billion euros under management. The bank is Denmark’s largest.

The size of the bank is an advantage for its intentions to get a bigger share of the Swiss market, because potential clients will find a solid structure and established track record when they perform their due diligence.

Money-Laundering Scandal

The recent scandal about money laundering at its Estonian branch didn’t fit in with the picture of a morally and ethically sound Scandinavian operator. Clients from Russia and other Eastern states reportedly have washed some 30 billion Swiss francs ($30 billion) at the branch, a scandal that the asset managers in Switzerland also were confronted with, even if they had nothing to do with the affair.

«We are part of Danske Bank and have of course been affected,» said Homsy. «But we haven’t lost any customers in Switzerland, because they can distinguish between the business in Estonia and our asset management in Switzerland.»

To prevent such scandals from happening again, Danske has upped internal controls. It has 1,200 members of staff in compliance – out of a total 21,000 employees.

Swiss Office Next

The company has prepared its move into Switzerland carefully and has hired Maya Moors (pictured below) as director of business development in spring. The former banker with Julius Baer, Lombard Odier and Banque Cantonale Vaudoise knows the Swiss market very well and is opening the doors at pension funds, banks and insurance firms for her new employer.

Moors 1

Currently, Moors is based in the Frankfurt office of the asset management, but Homsy is clear about his next step: «It is our intention to have an office in Switzerland, with two representatives of the asset management,» said the German distribution expert. The bank will launch a subsidiary of the wealth management division for that purpose.

The opening of a Swiss office may come as early as next year, depending on the development of the bank’s business in the country. Germany and Luxembourg currently are the two only markets with a representation of the asset management outside the Nordics.

Variety of Products for Swiss Market

Danske Bank is offering well established products in Switzerland, unlike for instance in Sweden, a market that craves new products. «The risk appetite is much bigger in Sweden, nobody would buy a Danish mortgage bond there,» Homsy said. The Swiss, however conservative they may be in terms of their investment behavior, do like Danske’s sustainability products, a business that is particularly important in the Nordics.

Apart from the mortgage bonds and the sustainability products, Danske in Switzerland has a third strong pillar with European small caps, funds that are mainly sold through wholesale providers.