U.S. equities dipped lower in September, as the S&P 500 suffered its biggest monthly decline since last December and its first back-to-back monthly decline in 2023. Historically, September has proven to be a challenging month for equities, with the S&P 500 averaging a 0.7% decline in September since 1945, the worst of any month. In addition, performance has declined in September in each of the last four years.
During the month, treasury yields rose as investors are expecting that the Federal Reserve’s high-altitude interest rates may last longer than originally anticipated. The recent move in rates was driven by resilient macro data, rising energy prices and underwhelming disinflation momentum. Investors find themselves in an unusual situation where they can secure higher yields on short-term debt without the need to commit their funds to longer-term investments to achieve higher interest income. This is known as an “inverted yield curve”.
Small-cap stocks remained under pressure throughout the month, continuing their trend of underperformance relative to the broader equity market in the year 2023. We continue to see abundant opportunities in small to mid-cap stocks, given the compelling valuation of the Russell 2000 Value, which currently trades at only 10-12x earnings.
Market weakness continued in September for the convertibles market although convertibles continue to outperform underlying equities in weak markets. However, with over 40% of the market now fixed income alternatives, the moves in interest rates have weighed on valuations. We believe this environment presents an opportunity, and over the coming two years, we anticipate that many fixed income equivalents will accrete towards par, while new issuance will offer a more traditional asymmetrical return profile for convertible investors.
New convertible issuance has picked up over the past two months, and we saw a mix of issuance that included companies that are new to convertibles, along with some that are returning to refinance existing debt. This mix of issuance is good for the convertibles market, and it has generally been at attractive terms with higher coupons and lower premiums than many existing issues. We have continued to see companies buying back convertibles in a transaction that is accretive to earnings and positive for the credit and we expect this bid to continue.
M&A results were mixed in September, as deals like Activision and Horizon Therapeutics progressed towards closing in October, while interest rate and market volatility in the market weighed on other deals. In September, the U.K. CMA said that Microsoft’s revised deal structure for its $70 billion acquisition of Activision (ATVI-$93.63-NASDAQ), that includes selling cloud gaming rights to Ubisoft, likely addresses its concerns and could clear the way for the deal’s final remaining regulatory approval.
M&A activity in the third quarter increased 16% from second quarter levels, reaching $2 billion for the year, a decrease of 27% compared to 2022 levels but it is positive to see activity trending higher in recent quarters. New deal activity in September included Hostess Brands being acquired by J.M. Smucker for $5 billion, Splunk being acquired by Cisco for $26 billion, WestRock being acquired by Smurfit Kappa for $21 billion and NextGen Healthcare being acquired by Thoma Bravo for $2 billion. These deals are providing new opportunities for arbitrageurs to deploy capital that has been harvested in recently closed deals.
Opinion article by Michael Gabelli, Managing Director and President of Gabelli & Partners.
To help advisors navigate the decision-making process and learn about the associated benefits, as well as address concerns of moving to an independent model, Fidelity created an Independence Hub, a central location for insights, tools, and practical steps to support advisors on their path to independence, including actionable guides for each phase of their journey—consideration, transition, and growth.
New research from Fidelity Investments shows that about 1 in 6 advisors have proactively switched firms in the past five years, with independent business models as the top destination.
In fact, 94% of advisors are happy with their decision to move, with 85% noting an increased control over their future. Despite this popularity, only half of advisors consider themselves knowledgeable about firm types (54%) and independent models (49%), and only 25% know the various intermediaries (e.g., 3rd party recruiters, consultants, clearing or custody providers) that can help with finding a firm. Advisors may prefer independence and the benefits associated, but the lack of knowledge and fear of the unknown may be preventing them from taking that leap.
“Arming advisors with the resources needed to help expand their breadth of knowledge has always been a priority,” said Rohit Mahna, Head of Client Growth at Fidelity Institutional Wealth Management Services. “Fidelity is committed to leveraging its deep expertise to not only help educate advisors and provide the tools needed to facilitate better outcomes, but be a true collaborator as advisors look to build their businesses.”
Fidelity recently welcomed Concurrent Advisors to its platform after their move to independence, transitioning 60+ advisor teams with more than 20,000 accounts in just three months, and continuing to grow at a compelling pace.
“Meeting advisors where they are and helping them achieve their vision is key to what we do, and in many ways, Fidelity did that for us,” said Nate Lenz, CEO and Co-Founder at Concurrent Advisors. “From operating on a broker-dealer platform and wanting to take the next step to becoming fiduciaries for our clients, Fidelity opened the menu of possibility in terms of solutions, technology, and growth opportunities.”
New Independence Hub
Fidelity drew from its deep experience of business development, practice management, technology, and investment consulting to develop a suite of resources to help guide advisors through the various stages of independence, inform their decision, and be better prepared, no matter the phase of their journey. All accessible through the new Independence Hub:
RIA Valuation Tool, a new on-demandformat,which helps advisors of all sizes understand their potential economics as they go independent, including increases in earnings and/or revenue compared to their current model. This online tool is a self-serve option for advisors who want a quick analysis, although those interested in deeper discussion can meet with Fidelity for a more thorough review of their business analytics.
New thought leadership, Build Your Own Tech Stack One Step at a Time, whichoutlines a simplified approach for newly independent advisors to get the tech they need, when they need it, and evolve as they grow. As technology becomes more imperative to advisors’ businesses, help in navigating the process of building a new tech stack enables advisors to find their best fit from a position of strength.
Increased Growth and Job Satisfaction Among Independent Advisors
Eighty percent of movers reported asset under management (AUM) growth since switching, with a median increase of 42%. In fact, Cerulli projects that independent and hybrid RIA channels will have a higher AUM growth rate over 5- and 10-year periods. Contrary to popular belief, nearly all advisors (99%) said their clients were ultimately supportive of their decision to move, with over half (54%) noting they were immediately supportive.
GenTrust made their move to independence more than 10 years ago, leveraging Fidelity’s diverse capabilities to help expand and grow their business.
“GenTrust was founded with the goal of providing holistic, conflict-free advice for its clients and attracting other advisors who value the same,” said George Perez, Founding Principal at GenTrust. “With its focus on being a destination for other firms to pursue independence, Fidelity provides us the resources and platform to support our business’s changing needs, allowing us to deliver a high level of service to our clients. Clients are at the core of who we are, and Fidelity’s experienced professionals understand and appreciate the importance of delivering the service our clients deserve, always striving to put their interests first.”
Among the many factors influencing an advisor’s decision to move, the top considerations include: compensation (51%), better firm culture (50%), and the ability to provide a higher level of client service (39%). The most notable concerns are: fear of the unknown (60%), client attrition (48%), and time spent transitioning vs. managing the practice (35%). However, 39% reported that none of their initial concerns ended up being a significant issue, and 68% agree they should have made the move sooner.
The Wealth Alliance was founded in 2019, and chose Fidelity as a destination to help support their clients’ needs and growth journey.
“We pride ourselves in supplying customized approaches and solutions for our advisors to accommodate their unique needs, and Fidelity helps us achieve that,” said Robert Conzo, CEO and Managing Director at The Wealth Alliance. “We wanted more, our clients wanted more, and Fidelity’s agility and custom-made strategy empowers us to build a destination that allows like-minded advisors to do the same for their clients.”
Dominion Capital Strategies announces the promotion of Rodrigo Raffo to the position of Latin America Sales Director.
In this role, Raffo will oversee sales and business development efforts in Latin America, leveraging his deep knowledge of the region’s financial markets and his extensive experience in the industry.
He has been an integral part of Dominion Capital Strategies since the company’s inception in 2017, where he has consistently demonstrated his dedication, expertise, and leadership, the firm said.
With over a decade of experience in the financial services sector, including more than 10 years at an Independent Financial Advisor (IFA) firm, Raffo brings a wealth of industry knowledge to his new role.
“Rodrigo’s deep understanding of the Latin American market and his proven track record in the financial industry make him the perfect candidate to lead our efforts in this strategically important region,” said Pablo Paladino, Global Sales Director at Dominion Capital Strategies.
This promotion underscores Dominion Capital Strategies’ commitment to aligning its strategy and culture with the unique dynamics of the Latin American market. As Latam Sales Director, Rodrigo will work closely with his team to provide the highest level of support to Independent Financial Advisors (IFAs) across Latin America, the press release added.
“Latin America offers tremendous opportunities for growth and innovation in the financial services sector, and I look forward to leading our team in delivering exceptional value to our clients and partners in the region,” Raffo said.
Patria Investments Limited (“Patria”) announced an agreement for the carve-out acquisition of a private equity solutions business from abrdn Inc. (“abrdn”).
Upon closing, the acquired platform together with this existing business will form a new vertical – Global Private Markets Solutions (“GPMS”). On a pro forma basis, GPMS is positioned to launch with an aggregate FEAUM of over $9 billion and will be led by Marco D’Ippolito. This vertical will further develop a complementary pillar of growth to serve as a gateway for Latin American investors to access private markets on a global scale, the firm said in a press release.
“We’re very excited to announce this new addition to Patria’s investment platform, which advances an important aspect of our growth strategy,” said Alex Saigh, Patria’s Chief Executive Officer. “As we continue to see a financial deepening unfold in the region, local investor allocations to alternatives are evolving from local products to more sophisticated global exposure to the asset class. The transaction will bring Patria in-house expertise in high-demand strategies that offer diversified exposure and an attractive performance track record. This business will increase Patria’s permanent capital AUM, further diversify our product menu, and should deliver an accretive earnings stream for our shareholders.”
Tailored client solutions and drawdown funds consisting of primaries, secondaries and co-investment strategies have grown into a major component of the private markets ecosystem. Primaries offer diversified exposure for investors and provide underlying general partners with an important source of anchor capital, while secondaries and co-investment strategies can provide investors with enhanced return profiles and improved portfolio management. Secondaries and co-investment strategies in particular have shown impressive growth in recent years, with global AUM growing at a CAGR of 16% and 21% respectively from 2019 to 2022, according Patria information.
The abrdn Private Equity solutions business operates from offices in London, Edinburgh and Boston, with a team of more than 50 employees. As of June 30, 2023, the platform manages $7.8 billion of Fee Earning AUM across the aforementioned strategies through drawdown funds, a listed private equity trust and separately managed accounts, with investment exposure primarily to the European and US middle market. With an impressive performance track record over 15 years, the business has built a loyal global client base, and has current investment relationships with more than 150 general partners.
Marco D’Ippolito, Patria’s Chief Corporate Development Officer said: “We are joining forces with a talented team that reflects Patria’s entrepreneurial investment culture, and acquiring an established solutions platform that brings differentiated investment capabilities to serve our clients. I am excited to work with Merrick and his team to fully leverage Patria’s platform as we grow together.”
Merrick McKay, the Head of abrdn Private Equity, said: “We are delighted to be the cornerstone platform in Patria’s new Global Private Markets Solutions strategy vertical, recognizing that this is Patria’s first acquisition outside Latin America. We believe that Patria is an excellent partner for our business and clients, as the combination will support and enhance our continued development as a leading European and US private equity solutions provider for institutional investors. This includes the ability to offer our private equity solutions to the fast-growing Latin American market where Patria has such a leading presence and strong reputation. We also look forward to working with Patria’s global distribution team, which manages Patria’s long-lasting relationships with many of the world’s most sophisticated private markets investors.”
Transaction Details
Transaction includes total consideration of up to £100 million (or currently ~$122 million) payable to the seller in cash, with £80 million as base value and £20 million contingent on certain performance factors. Timing of payments includes £60 million payable at closing, £20 million payable at 24 months from closing, and up to £20 million payable at 36 months from closing pending certain performance factors. The initial payment of £60 million will be financed through a bank credit facility maturing 36 months after closing. The transaction is expected to close in the first half of 2024 pending regulatory approvals, and is expected to be accretive to Patria shareholders in 2024. Rothschild & Co served as financial advisor and Macfarlanes LLP served as legal advisor to abrdn. Latham & Watkins LLP served as legal advisor to Patria.
As part of its continued growth in the US, Vontobel Swiss Financial Advisors (SFA) has appointed Victor Cuenca as Head of Wealth Management Miami Branch to build on its offering for Latin American clients.
Victor Cuenca brings more than 20 years of business development experience with institutional and private banking clients in Latin America, Spain and Portugal.
He will be responsible for strengthening wealth management client relationships in Miami and implementing Vontobel SFA’s business strategy with Latin American clients, including US and non-US residents in the Americas. Victor joins Vontobel SFA from Santander Private Banking in Miami, where he held various senior roles in financial advisory and business development.
Prior to that, he worked for Allfunds Bank, where he had the position of Head of Sales Spain and previously Regional Manager Latin America. He holds a Bachelor’s degree in Economics from the University of Alcala in Madrid and an Executive MBA from the IE Business School in Madrid.
“We are pleased to welcome Victor, whose client-focused track record is well aligned with our priority to delivering quality solutions to investors,” said Peter Romanzina, CEO of Vontobel SFA. “This appointment further demonstrates our commitment to maintaining strong growth in the US with an expanded footprint, while helping our clients diversify their wealth globally.”
“I am excited to join Vontobel SFA and bring this new offering from our Miami office to Latin American investors,” commented Cuenca on his appointment. “Vontobel’s personalized and added value services offer a great opportunity to high-net-worth individuals. Miami is closely connected to Latin America and is viewed as the financial capital for the region, so our presence here is key to developing this market.”
LendingTree, the online financial services marketplace, released survey results on how Americans prioritize technology in relation to their financial decisions.
The survey showed that 77% of Americans find it essential to have the latest technology and gadgets. This sentiment is particularly strong among younger consumers, with 88% of Gen Zers and 86% of millennials stating that having the latest technology is important to them.
Further data indicates that 28% of Americans would prioritize purchasing the latest technology over fulfilling basic financial obligations such as paying rent or bills.
Among Millennials and Gen Zers, the numbers rise to 45% and 38%, respectively. Additionally, of those who prioritize technology over financial commitments, 78% admitted they would choose to buy a new phone, such as the iPhone 15, over paying rent or bills.
Adding another layer to the financial aspect, the survey found that 26% of Americans have taken on an average debt of $1,492 to acquire the latest technology products. The items causing this debt are primarily phones at 69%, followed by computers at 41% and smartwatches at 27%.
Brand loyalty also surfaced as a point of interest in the survey. Specifically, iPhone users are more than twice as likely as Samsung users to upgrade to a new phone model when it is released, with percentages at 9% for iPhone users versus 4% for Samsung users. In contrast, 35% of Samsung users wait until their current phone breaks before purchasing a new one, compared to 24% of iPhone users.
Matt Schulz, LendingTree’s Chief Credit Analyst, provided a tip for consumers, stating that if they can afford to buy the latest technology and pay it off within a month or two, then they could proceed with the purchase. However, if they cannot afford it, Schulz advised consumers to start saving money to better afford the technology in the future.
“As cool as that new iPhone might be, avoiding unnecessary debt is a whole lot cooler. If you can afford to buy it and pay it off in a month or two, have at it. If not, make a plan and take it slow. Instead of rushing to buy, start putting some money aside to help you better afford it in a few months. Even if you can’t save enough to pay for all of it, what you are able to put away will help lower the interest you’ll pay in the future. Remember, this isn’t a one-time thing like a Taylor Swift or Beyonce concert coming to your town. These phones are going to be available for a long time, so there’s no rush,” Schulz said.
With many advisors reluctant to delegate portfolio construction, managed account sponsor firms and their asset manager distribution partners are keen to provide advisors with the necessary tools and resources to become better portfolio managers, according to the latest Cerulli Edge—U.S. Managed Accounts Edition.
Managed account sponsors remain concerned about the operation of their advisory discretionary programs, ranking consistent underperformance (82%), straying from investment policy, (79%), and lack of investment review (71%) as chief issues.
To address these concerns, sponsor firms are introducing new tools and resources to help steer their advisors toward better portfolio outcomes, rolling out resources for better security research and selection as well as access to professional portfolio managers and risk-budgeting tools.
While these tools likely enable portfolio construction and management, sponsors are also providing access to performance analysis on their performance relative to peers (40%) and information on the dispersion of accounts (33%), which could tilt advisors toward a home-office or third-party solution.
“Sitting down with an advisor and showing them why they may be underperforming, have inconsistent returns, or may not perform as well as others in downmarkets can be a simple but very powerful tool to spark a change in the way in which an advisor thinks about portfolio management,” says Michael Manning, analyst.
Asset managers also play a critical role in supporting advisors, ranking thought leadership (73%), asset allocation information (50%), and portfolio construction resources (46%) as valuable resources.
Cerulli recommends managed account sponsors consider firm-wide priorities to help define and clearly communicate to asset managers which resources they believe would be useful to help support the portfolio construction and management efforts of their advisorforce.
Likewise, home offices should seek input from their advisors in terms of what they need help with as well as what additional education is necessary for portfolio construction.
“Frequent communication is critical to ensuring that sponsor firms provide resources that add value to portfolio management and that advisors are aware of and are taking advantage of them,” concludes Manning.
Robeco announced the restructuring of its American operations into the entity Robeco Americas, headquartered in New York, and the expansion of its agreement with LarrainVial, which includes the wholesale business in US Offshore and Latam, based in Miami.
LarrainVial will continue to distribute Robeco’s funds for Latin American institutional clients as it has been doing for the past twenty years.
María Elena Isaza and Julieta Henke, directors and sales managers of Robeco’s US Offshore and Latam business, will join LarrainVial as managing directors and “will continue to be based in Miami,” according to a memo sent to Robeco’s clients, which Funds Society has accessed.
Both Isaza and Henke will receive full support from Robeco and LarrainVial to continue their growth efforts in the region, offering the same exceptional service and products to clients, adds the exclusive communication for clients.
“This appointment will not have any impact on the operational and contractual aspects of our commercial relationship with our American and Latam Offshore clients. Everything remains the same!”, emphasizes the communication that was not made public.
On the other hand, Robeco will centralize its operations into a single hub, with all Robeco employees based in New York. This hub will serve GFIs, the U.S., Canada, LATAM, and US Offshore.
The amalgamation of Robeco’s activities in America will be led by Ignacio Alcántara and “is driven by the desire to offer efficiency in customer services in a highly regulated and competitive market,” says the statement released by the firm.
The focus also aims to ensure consistency in client interactions, optimize resource allocation, and facilitate ongoing compliance with industry regulations.
“By centralizing our operations in America and forging strong partnerships, like the one we have with LarrainVial, we are better positioned to effectively serve our clients in the future… We have been working closely with LarrainVial in the LATAM markets (excluding Brazil) for over 20 years, and we are excited to extend this cooperation to the US Offshore and LATAM market. LarrainVial’s extensive experience and presence in America align perfectly with our mission to offer top-tier investment solutions to our clients,” commented Malick Badjie, global director of Sales and Marketing at Robeco.
On the other hand, Fernando Larraín, CEO of LarrainVial, said that “with a rich history spanning over 90 years, LarrainVial has amassed extensive experience in the distribution business across America. The US Offshore market is of immense importance to LarrainVial as a key area for growth.”
China is not only the second biggest economy in the world, it’s also the second biggest bond market(1). No wonder that when China sneezes, investors in emerging market (EM) bonds become nervous. But we believe there is no need for panic – for three key reasons.
For a start, China’s economic prospects are not as challenging as they first appear.
Although the real estate sector remains weak, there are some bright spots elsewhere. Domestic tourism is now higher than pre-Covid, and outbound tourism is now back to over 50 per cent of 2019 levels (which also benefits the rest of EM Asia, such as Macau, Hong Kong and Thailand). The service sector more broadly is holding up well and public investment is strong.
Chinese authorities have also been proactive in shoring up growth. They have reduced interest rates and provided support to the real estate sector. Mortgage rates have been cut by 150 basis points from the peak and this tends to impact borrowers with a lag, so the benefits have largely yet to materialise. At the recent Politburo meeting, authorities pledged to step up counter-cyclical measures, which could include plans to help young jobseekers and the easing of purchase restrictions to support the real estate sector. The Politburo meeting omitted the phrase “housing is for living, not for speculation purposes” – an important signal.
Economists have recently downgraded Chinese growth projections for 2023, with consensus expectations converging towards the official forecast of 5 per cent. Although this is lower than initial expectations (of around 6 per cent after a very strong rebound in Q1), it is still a marked improvement compared with last year.
This, in turn, should help emerging markets more broadly to retain an attractive growth differential relative to their developed peers – to the benefit of EM sovereign and corporate bonds.
We see the growth gap at around 4 ppts for this year and next. This is a sizeable buffer and thus, even if China’s growth was to fall short of current expectations, the growth gap between EM and DM would still be significant.
Our analysis shows that historically such a gap has been accompanied by the appreciation of EM currencies versus the US dollar and general outperformance of EM assets (see Fig. 1).
Fading dominance
Secondly, while China is clearly a very important part of the EM universe, its dominance is not as strong as it once was. The fate of other emerging markets has de-coupled from that of China in recent years in terms of both macro and asset class performance.
Different approaches to Covid-19 lockdowns and policy responses have resulted in diverging paths for growth, rates, and inflation. China locked down more severely than many other countries. It is thus only now recovering economically and has not seen the sharp rise in inflation witnessed almost everywhere else in the world, to varying degrees.
While other EM central banks, especially in Latin America, have proactively raised interest rates over the past two years, the People’s Bank of China (PBOC) has stayed on an easing path to support growth. Now, other EM central banks are getting ready to ease monetary policy, which would potentially offer a huge boost for their local debt markets. Chinese assets won’t get such a marginal boost as the PBOC is already in easing mode, although its current monetary stance should be a slight positive rather than a hindrance to the general EM monetary easing theme.
The divergence also underscores decreased dependence of other EM economies on China through the commodity price link. Back in the 2000s, Chinese demand for commodities was a major boost for the developing world given the dominance of commodity exporters in the EM universe at the time. However, nowadays, EM is a much more diverse group and has a much more balanced ratio of commodity exporters and importers. Therefore, today’s lack of commodity demand from China is much less of a problem for the rest of EM than would have been the case 10 or 20 years ago.
Not surprisingly, markets are also differentiating between Chinese assets and those in other EM (see Fig. 2).
The JP Morgan Local Sovereign index, GBI-EM, is up 10.5 per cent year-to-date in USD terms, whilst its China sub index is down 0.7 per cent over the same period. This mirrors currency performance – while, for instance, LatAm currencies have rallied this year, led by the Brazilian real, the Chinese renminbi has lost 3.3 per cent versus the US dollar(2).
Opportunities beyond China
Thirdly, we see some very positive developments across the developing world, which give rise to potentially rewarding investment opportunities.
Mexico is benefiting from companies shifting production closer to the US market. Real estate vacancy rates have dropped significantly in major Mexican cities, while asking rents are rising. Overall, we expect near-shoring to boost Mexican exports by almost 3 per cent of GDP through near- and medium-term opportunities. Similar trends are also at play in other Latin American countries. Some of this investment is being diverted away from China due to geopolitical tensions between Washington and Beijing. China’s loss, therefore, will be the gain of other EM economies.
India and Indonesia, meanwhile, are both seeing an improvement in economic growth, which is largely domestically driven. This bodes well not only for sovereign debt, but also for credit in some sectors. Our EM credit teams particularly like green energy companies in this region, as well as infrastructure and transport in India and consumer companies in Indonesia. Financials should do well as strong economic growth translates into increased lending.
We are also seeing positive developments in some frontier markets. Nigerian authorities have recently harmonised the country’s myriad exchange rates, signalling a move to more focused and predictable monetary policy and a non-interventionist currency regime. They have also cut expensive fuel subsidies, raising the possibility of an improvement in Nigeria’s fiscal balances, which in turn should increase investor confidence and capital inflows into the country.
Zambia, meanwhile, has struck a breakthrough debt refinancing deal, and Ghana is expected to follow suit.
For now, we believe some of these opportunities are more compelling than those on offer in China itself, where a number of our portfolios are positioned more neutrally. We nonetheless think that in the medium term, China remains an important part of a diversified (EM) portfolio; its large domestic economy allows it to tailor-make policies uncorrelated to developments elsewhere in the world.
Currently, within China, we like the technology sector. There have been much more friendly policy signals recently after three years of regulatory crackdown. Conversely, we remain cautious on the real estate sector.
Overall, we believe China’s slowdown is manageable, especially as it has already triggered further support from authorities, with the trough likely behind us in Q2. Prospects for emerging market debt remain strong, with some attractive opportunities to be found within China and many more beyond it.
(1) Pictet Asset Management, IMF World Economics Outlook as of Oct 2020.
(2) As of 24.07.2023
Piece of opinion written by Sabrina Jacobs, Senior Client Portfolio Manager of Pictet Asset Management, and Echo Chen, Investment Analyst of Pictet Asset Management.
Julius Baer will change its regional structure, create encompassing responsibility for client experience, and strengthen the importance of people management and culture. As a result, the Group makes new appointments to the Executive Board. The changes in structure and leadership are designed to enhance the delivery of its targets for the 2023–2025 strategic cycle and beyond.
As of the beginning of 2024, Julius Baer Group complements its leadership team through a number of in-house promotions and select new hires.
The changes in regional structure will create maximum proximity to clients and their needs, thereby accelerating the growth of the Group’s franchise. The newly created division Client Strategy & Experience will set global standards in client service, providing support, segment management, marketing, and front risk management for all Regions. With the representation of Human Resources in the Executive Board, the updated leadership structure further reflects the central role of people and culture in Julius Baer’s strategy of focus, scale and innovate.
Commenting on the changes, CEO Philipp Rickenbacher said: “Creating value for our clients and stakeholders is at the heart of our purpose – it is the key to our success. Our organisational structure and freshly composed leadership team, with its blend of in-house and new talent, will create the momentum and continuity needed to achieve our targets. It is also the optimal structure to fuel Julius Baer’s ability to capitalise on the growth opportunities in the wealth management industry.”
Further changes effective 2024
Yves Robert-Charrue decided to leave the Group at the beginning of 2024 and will therefore step down from the Executive Board. Philipp Rickenbacher said: “The unrivalled position that Julius Baer enjoys today in Switzerland, Europe, and the Middle East is an outstanding achievement of Yves Robert-Charrue and his teams. A highly esteemed and valued colleague since 2009, I would like to thank Yves for his leadership and loyalty and wish him the very best for his professional and personal future.”
Beatriz Sanchez will also step down from the Executive Board, reflecting her wish to relinquish operational responsibilities, and assume the strategic role of Chair of Americas at Julius Baer as of January 2024. Philipp Rickenbacher said: “Betty Sanchez has been invaluable in re-structuring the Americas business and positioning it for renewed growth. I am immensely grateful for her great contribution and delighted that she will continue to work with us in her new role.”
Background on new Executive Board members, with designated roles
Sonia Gössi, Switzerland & Europe, will join Julius Baer on 1 January 2024 from UBS, where she was Sector Head Wealth Management Europe International North. She started her career in audit and business consulting and joined UBS in 2004, where she held senior client-facing roles in wealth management as well as various risk control and risk management positions.
Carlos Recoder Miralles, Americas & Iberia,today Head Western, Northern Europe & Luxembourg at Julius Baer, joined the Group in 2016 from Credit Suisse, where he started his career in private banking in 1997 and last held the role as Head Private Banking Western Europe.
Rahul Malhotra, Emerging Markets, is currently responsible for Julius Baer’s Global India franchise (onshore and non-resident), Japan, and Asian clients served out of Switzerland and Japan. He joined from J.P. Morgan in 2021. Rahul will be based primarily in Dubai, recognising the financial hub’s central role for these growth markets.
Thomas Frauenlob, Intermediaries & Family Offices,will join on 1 April 2024 from UBS. He is currently the Head of UBS’s Global Financial Intermediaries Business and was previously in charge of their Swiss Global Family Office and Ultra High Net-Worth franchise. He started at UBS in 2010 as Head Equities Switzerland, following roles in the institutional business of Deutsche Bank and Goldman Sachs.
Sandra Niethen, Client Strategy & Experience,is currently Chief of Staff and Head of Strategy at Julius Baer, a role she has held since 2020. Her financial services career of over 20 years spans a number of senior positions in private wealth and asset management, in international client-facing, strategy development, and sales management roles at Deutsche Bank and DWS.
Guido Ruoss, Chief Human Resources Officer & Corporate Affairs,has been Global Head Human Resources at Julius Baer since 2015. Previously he was responsible for business and product management in the Bank’s Investment Solutions division. He joined Julius Baer in 2008, after several years in the asset management and alternative investment industry.
Christoph Hiestand, Group General Counsel, has been with Julius Baer since 2001 and has held the role of Group General Counsel since 2009. Before joining the Bank, he worked as an attorney-at-law in law firms in Germany and Switzerland.
