As the tenure of CEO Zeno Staub comes to an end, Vontobel reported billions of francs in outflows in its Asset Management unit. However, the investment house confirmed its targets in its nine-month report.
Asset Management, the flagship division of Zurich-based investment house Vontobel, lost more client assets in the past nine months. On Tuesday, the division suffered around 5.4 billion Swiss francs ($5.9 billion) in net outflows since the start of the year, according to a media release.
The Wealth Management unit, on the other hand, attracted 3 billion francs in net new money, resulting in net outflows for the Group amounting to 2.5 billion francs.
Thanks to the performance of the investment solutions business, Vontobel's assets under management increased slightly from 204 billion francs at the beginning of the year to 207.3 billion at the end of September 2023.
Cautious Institutional Investors
Vontobel reported an increase in income from the previous year, although it provided no figures. On the cost side, it said it's on target with its savings.
Heightened geopolitical risks led to a restraint of institutional investors globally for new fund investments. The company is feeling the effects of this in asset management, according to the business development announcement.
More Client Advisors
Wealth Management is a bright spot for the firm, where it intends to invest further despite cost-cutting. Over 50 new client advisors are expected to start work early next year.
The third pillar of its business model is struggling. Operating income in the Digital Investing division, which houses the derivatives business, was down year-on-year in the third quarter due to generally lower demand for structured products, it said.
Prolonged Difficulty
Zeno Staub, the institution's long-time CEO, hands over his role to a dual leadership team to Wealth Management's Georg Schubiger and Christel Rendu de Lint in Asset Management at the end of the year. «In Asset Management, we are experiencing a prolonged difficult period, like many in the industry. Vontobel has the necessary strength to master this cycle in Asset Management,» Staub said of the results.
He confirmed that the company is sticking to its targets.
Solid Financial Position
Vontobel sees itself in a solid position. Its capital position remains well above its capital targets, with a core capital ratio (CET-1) of over 12 percent and a total capital ratio of over 16 percent. In September, Vontobel placed new mandatory convertible notes (AT1 notes) with a total nominal value of $400 million with funds managed by US financial investor Apollo Global Management.
