Franck Sabbah knows asset management from two different perspectives: as a portfolio manager and as a distribution executive.

After around 25 years in the industry, he is striking out on his own. Through Geneva-based Solid 3, founded this summer, he aims to help specialist asset managers develop their business in Switzerland.

The move was prompted by a strategic decision by his former employer. Berenberg decided to discontinue its asset management sales activities outside Germany. After building the case from scratch since 2016, the announcement came as a surprise, Sabbah tells finews.

He drew a clear conclusion for his own future: “In asset management, you are either a very large player or you need to be truly different.”

Not Another Provider of Standard Products

Sabbah therefore has no intention of offering interchangeable core strategies. His network hardly needs him to gain access to such products. Instead, he sees an opportunity where investors need specific solutions and in-depth knowledge of a strategy.

His professional background fits that approach. At Edmond de Rothschild Asset Management, he headed the currency overlay business, managing clients’ currency risks. He then spent almost ten years at Berenberg, developing its asset management activities outside Germany. His focus included European equity strategies, particularly small caps.

With Solid 3, he is once again concentrating on a limited number of areas. “I don’t claim to be an expert in every asset class,” Sabbah says. Investors looking for a comprehensive offering can turn to a global provider. His own strength will lie in understanding selected strategies and how they can be used.

Two Initial Partners

The first partnerships reflect this approach. Solid 3 supports currency specialist 7orca and European equity boutique Indépendance AM with distribution in Switzerland.

Specialising in currency overlay since 2017, 7orca manages around €23 billion, according to the company materials provided. Its offering covers active,passive currency risk management and FX services.

Indépendance AM has focused on European equities since 1993, with an emphasis on small and mid-sized companies. According to the materials, it manages around €2.5 billion.

Sabbah is looking for partners with an established track record and a clear specialisation. Experienced investment managers launching their own businesses could also be considered. What matters is the quality of the strategy and a commitment to developing a long-term presence in Switzerland.

Five to Seven Partners, Rather Than Twenty

Sabbah is deliberately avoiding the broadest possible offering. He wants to work with five to seven partners. Too many providers would make it harder to understand their strategies in sufficient depth and devote enough attention to each relationship.

One or two further partnerships could follow within the next six months, although there is no fixed timetable.

His approach also reflects a personal principle: he wants to represent only products he would consider investing in himself. A long-term perspective and the flexibility to respond to clients’ needs are equally important to him.

Outsourcing Distribution Rather Than Building an internal Team

For specialist asset managers, Solid 3 aims to offer an alternative to establishing their own Swiss distribution operation. Finding suitable employees, building local relationships and financing market entry over an extended period are demanding tasks, Sabbah says.

An experienced salesperson in Zurich or Geneva represents a significant cost. That increases the pressure to deliver results quickly. For boutiques in particular, partnering with an external distribution specialist could therefore offer an easier route into the market.

According to Sabbah, Solid 3 is remunerated on a success-based model. The company receives a predetermined share of its partners’ fees. Pricing for end clients remains unchanged.

International Expansion Is Possible

Within five years, Sabbah would like to have teams in Geneva and Zurich and add three or four partners to the existing relationships. A presence in Paris or another European location could follow later. For now, the focus is Switzerland.

For Sabbah, difficult market conditions will also test whether the model works. When performance is strong, conversations with investors are easier. The real quality of a distribution partner becomes apparent when a strategy comes under pressure. “That is precisely why relationships need to extend beyond the next sale,” he stresses.