Swiss independent asset managers are quietly being bought up by foreign investors as new Finma requirements take hold.

Quaestor Coach, a Zug-based private investor, has taken over Diem Client Partner (DCP). a well known Zurich boutique independent asset management firm. According to the buyer, the transaction was concluded at the end of last December for an undisclosed price. 

The takeover also heralded the local market entry for Quaestor, according to Mathias Vandermeeren, who has been finding and evaluating acquisitions for the private investor in Zurich and Geneva, and that since 2020. Others are expected to follow this one, with DCP serving as a platform. «Switzerland is becoming a focal point for independent asset management takeovers», Vandermeeren says.

Institutionals at the Door

Quaestor Coach says it is pursuing a long-term strategy that builds takeover targets into a larger, independent platforms. They are not looking for quick exits. It has done the same in the Netherlands, where they built the Auréus Group by making seven takeovers between 2018 and 2021, turning it into an asset manager with more than $2.2 billion US dollars in assets under management.

Institutional investors throughout Europe have pledged Quaestor Coach about $300 million, mainly for Swiss buys.

Fully Integrated in DCP

«There is a pipeline with further potential deals», he says. Quaestor Coach is looking at the local discretionary managers in detail, looking to integrate them under the DCP brand. As part of that, they are looking for companies with more than $270 million in assets that match the investment direction of the Zurich-based manager.

DCP head Sascha Peier is full of enthusiasm. «I could not have wished for a better or stronger successor for our clients», he said, indicating  both he and his team will continue to work the same way as before the takeover.

Prohibitively Expensive

It remains to be seen whether the current steps attract other independent Swiss asset managers. For the first time in years, though, there is movement in the market, which currently totals about 2,000 players. Much of it is due to a big turning point expected at the end of 2022, when small financial firms have to have made a license application with the Swiss Financial Market Supervisory Authority (Finma) while also being affiliated with a supervisory organization (SO). 

The sector is experiencing a severe jolt and many are getting nervous as operating under the new requirements is going to prohibitively expensive for many.

License in Place

Quaestor Coach and DCP want to use the momentum in the market from the new Finma licence requirement to expand their business. «Experience in the Netherlands with Mifid II shows that many smaller asset managers have to give up as a result of the regulatory burden», Vandermeeren indicates. «Quaestor Coach and DCP want to give them a way out.»

DCP, in contrast, has held a Finma license since 2013 and it has expanded that to comply with the FinSA Financial Services Act - one of the first independent asset managers to do so.