An American network of independent wealth managers is making its entry into Switzerland, adding a Geneva-based firm to its roster.
Focus Financial Partners is adding independent wealth manager Octogone to its roster of partner firms, marking Focus' entry into the Swiss market, the two companies announced Friday, as finews.com has learned.
The U.S. firm, which is listed on the Nasdaq stock exchange in the U.S., took on the Geneva-based firm to gain access to Switzerland, with the deal expected to be finalized in the third quarter.
Focus was founded in 2006 in the U.S. and connects independent wealth managers through its network. It subsequently expanded into Canada, Australia, and the U.K. The US network of independent wealth managers and fiduciaries is considered a role model for players such as Cinerius Financial Partners or Quaestor Coach, which have recently attracted attention in Switzerland with investments in independent wealth managers.
As CEO Rudy Adolf explains to finews.ch, Octogone joining the network brings the number of partner firms to 86, employing around 5,000 people worldwide and managing client assets of more than $350 billion.
Funds for Acquisitions
Firms within the Focus partnership retain their independence and can draw on the resources of the network, including capital. According to Adolf, Focus invested about $1 billion in company acquisitions and investments last year and is adding another $900 million to that this year. Since its founding, Focus has completed about 250 transactions, according to the chief executive.
«The Swiss market has been a priority for us for a long time,» Adolf explains. By adding Octogone, which manages almost 6 billion Swiss francs ($6.2 billion) in assets, the U.S. immediately landed a big fish when entering the Swiss market.
Moreover, by connecting to the Focus network, Octogone solves the succession problem within the company. «When you get older in this business, it's not easy to find an arrangement for the continuation of the company,» reports co-founder Joakim Lehmkuhl (pictured below).
(Image: Octogone)
The model offered by Focus is the ideal solution for this, he says, because it ensures continuity for the clientele. The company serves twelve wealthy families in addition to numerous other customers through locations in Zurich, Miami, the Bahamas, and Luxembourg. Another benefit is that younger partners in the company find the time and resources to commit to the firm, says the founder.
Lehmkuhl and Adolf now expect to be busy with takeover discussions in Switzerland over the coming months. «We are looking for discontinuity when we enter the market, and this is currently available in Switzerland,» Adolf says.
Talks Underway
In this, he is referring to licensing by the Swiss Financial Market Supervisory Authority (Finma), which all medium and large independent wealth managers must complete by the end of the year. Those who don't make it will no longer be allowed to offer their services.
«There will be many providers who will not make it by then,» Lehmkuhl knows from colleagues in the industry. Accordingly, Octogone and Focus have already initiated various talks with other independent wealth managers willing to join.
