Swiss banking giant on track to expand wealth operations in Europe.

Credit Suisse is enhancing its range of Asia Pacific products for Europe.

The pace of private banking mergers and acquisitions has finally shifted up a gear as another E2bn has been pumped into the industry in the second half of October. The spending spree came this time from the British private banking majors – HSBC Republic, Royal Bank of Scotland and Barclays Bank (BPC). Each deal has significant strategic characteristics and it is worth considering how well-placed each business is in terms of absorbing the new partners.

It might have been a grim year for investors overall, but as Sector Analysis research shows, the European funds industry is alive and kicking, especially in the UK, Spain and Italy.

Jörg Brock, Commerzbank’s head of product development, tells Roxane McMeeken about the arduous task of selling open architecture to the bank.
Selling products manufactured by your rivals is corporate suicide. If you have the capacity to create a wide range of investment funds in-house, why on earth would you sell the competition’s products simultaneously?”
This was the argument Jörg Brock came up against when he began advocating the introduction of so-called “open architecture” at Commerzbank in 2001. As head of product development for private clients at the German bank, he believes offering customers access to external funds best serves the interests of the entire firm – both the product sales division and the product manufacturing centre.

As an offshoot of Santander Central Hispano, Allfunds Bank controls half of the Spanish funds market. Yuri Bender explains how open architecture manager Juan Alcaraz plans to build on his success.
Talk to European and American asset managers looking for a Spanish distributor and there is one man’s name on their lips. “Juan Alcaraz is a good guy,” says one suave Italian representative of a US house. “Juan Alcaraz is a personal friend of mine, but he won’t buy my products, whatever I tell him,” ventures another Italian, resignedly. “We have been working very closely with Juan Alcaraz,” the London-based chief of a European house nods knowingly. So who is this man who appears to run the Spanish funds market?

There are two groups of individuals who shape the open architecture

movement. There are those who make the headlines in continental Europe

for devising strategy, persuading a bank’s entrenched management board

to sell products manufactured by bitter rivals and for signing

ground-breaking agreements with these rivals. This is the glamorous

side of the industry, managed by high-profile individuals who take

plenty of credit for their work. They are not afraid to stand up and be

counted for often controversial viewpoints and they have often been

pioneers in a highly conservative banking mindset.

The other group, on whom we focus in this second special report on the

state of open architecture today, based on speeches and interviews

during PWM’s special forum in London, sponsored by BGI and Fidelity,

include the unsung heroes. First there are the due diligence teams

which interview and analyse the universe of fund managers on behalf of

banking clients. There are also the rating agencies which intensively

gather data on fund managers, based on exhaustive face-to-face

interviews.

Then there are the men and women of the back office who construct the

systems, clear and reconcile the trades and make sure that all the

parties work together. It’s all very well for a medium-sized bank to

announce that it will start selling a selection of “best of breed”

external products. It is a brave decision to take. But the real work

starts for those who must monitor and select the managers, and the

fearless souls of the back office who will make sure customers who walk

into the branch on any European street can actually buy the fund they

have been promised.

– Reporting by Yuri Bender and Roxane McMeeken

A ‘risk-free’ investment should be the starting point before a solution can be individually tailored.