Julius Baer Group

Julius Baer Group Ltd.
Aktiengesellschaft
Traded as SIX: BAER
Industry Financial services
Founded 1890
Founder Julius Bär
Headquarters Zurich, Switzerland
Key people
 Daniel F. Sauter
(Chairman),
Boris F.J. Collardi
(CEO),
Dieter Enkelmann
(CFO)
Products Private banking, wealth management
Revenue IncreaseCHF 2.195 billion (2013)
Profit IncreaseCHF 188 million (2013)
AUM IncreaseCHF 254 billion (2013)
Total assets IncreaseCHF 72.522 billion (2013)
Total equity IncreaseCHF 5.039 billion (2013)
Number of employees
 5,390 (FTE 2013)[1]
Website www.juliusbaer.com

Julius Bär Group Ltd. (or Julius Baer Group, SIX: BAER) is a Swiss private banking group. It has locations in more than 20 countries. Switzerland and Asia are the group’s two home markets, with the head office being located in Zurich. Julius Baer employs a staff of over 5,300 worldwide.[1]

The group manages assets for private clients from all over the world. The firm's services consist mainly of wealth management and investment consultancy. The bank provides products via its open architecture platform as well as securities and foreign exchange trading. The shares of the Julius Baer Group are listed on the SIX Swiss Exchange and form part of the Swiss Market Index (SMI) of the 20 largest and most liquid Swiss stocks.

History

Boris F.J. Collardi, CEO, Julius Baer Group; Li Dongrong, Assistant Governor, People's Bank of China at the Horasis Global China Business Meeting 2010

Julius Bär Group Ltd. is a Swiss private banking group which is the parent company of Bank Julius Baer, a traditional private bank based in Zurich, Switzerland. The firm dates itself back to 1890 [2] when an exchange office was founded by Ludwig Hirschhorn and Theodor Grob. Joseph Michael Uhl and Julius Bär joined in 1896, when Theodor Grob left. In 1901, Julius Bär acquired the bank and remained as partner until 1922. Hans E. Mayenfisch joined the bank on July 1, 1913 as partner and was active until 1947. The sons of Julius Bär became partners as follows:[3] Walter Bär on October 1, 1913 until 1947, Werner Bär in 1921 until his death on February 2, 1960 and Richard Bär, who was a physicist became a silent partner in 1922. After his death in 1940 he was succeeded by his widow Ellen Bär. The members of the 3rd generation became active in the bank with Hans Bär on August 21, 1947 until 1996, last as chairman of the board of Julius Baer Holding Ltd, Nicolas Bär on September 22, 1951 until March 1993, last as Chairman of Bank Julius Baer & Co.Ltd, Peter Bär on November 1, 1955 until his death on November 11, 1998 last as member of the board of Julius Baer Holding Ltd., and Rudolf Bär 1969 until 2005, last as member of the board of Julius Baer Holding Ltd. Hans Bär was succeeded as Chairman by Thomas Bär 1996 until 2003. On July 4, 1970 Dr. Ernst Bieri, former head of the finance department of the City of Zurich joined as outside partner until 1990 last as member of the board of Julius Baer Holding Ltd.

The 4th generation was involved with the leadership of the bank with Raymond Bär[4] from 1988 until 2012, last as Chairman of the board of Julius Baer Holding Ltd. Michael Bär joined the bank in 1992 and was active in various senior operating functions, last as a member of the group executive committee until 2005. As representatives of the family shareholders Mark Bär (1999–2005), Andreas Bär (2003–2005) and Beatrice Speiser-Bär (2003–2009) were members of the board of Julius Baer Holding Ltd.[5]

Capital and scale

Julius Baer originally operated as a partnership and was incorporated on November 27, 1974 with a share capital of CHF 14.040 mio, divided into 56‘400 registered shares of CHF 100 each and 16‘800 bearer shares of CHF 500 each. The company went public in 1980. The Baer Families relinquished control in 2005 converting the share capital into a single class of registered shares all quoted at the SIX Swiss Exchange.[6]

According to the Scorpio Partnership Global Private Banking Benchmark 2014[7] the bank had 282.5 USD Bn in assets under management, a 40.7% increase in the 2013 figure.[7]

Acquisitions and growth strategy

In September 2005, Julius Bär acquired the independent private banks Ferrier Lullin, Ehinger & Armand von Ernst, Banco di Lugano, and the asset management house Global Asset Management (GAM) from the Swiss banking giant UBS AG, to become one of the largest independent wealth management firms in Switzerland.[8] UBS acquired almost 21% of Baer's shares as part of the deal,[8] but sold off its stake in May 2007 to fund a share buyback.[9] GAM was demerged as a separate company in October 2009.[10] The companies of the group are consolidated within Julius Bär Gruppe AG, whose shares are listed on the SIX Swiss Exchange.

In November 2012, Julius Baer and Milan-based Kairos Investment Management SpA (‘Kairos’) announced that they have reached an agreement for a cooperation to jointly create a leading onshore wealth management player in Italy. Julius Baer’s Italian SIM will be integrated into Kairos and, simultaneously, Julius Baer will acquire 19.9% of Kairos. The transaction is subject to regulatory approval and is expected to close in the first half of 2013. Secondly, subject to regulatory approval, the parties have also agreed to set up a new private bank in Italy by separately applying for a banking licence after the closing of this transaction. All Italian wealth management activities of the two groups will be run under the name Kairos Julius Baer. The transaction, the terms of which have not been disclosed, will significantly strengthen Julius Baer’s long-term position in Italy.[11]

Julius Baer agreed to acquire Merrill Lynch’s International Wealth Management business (IWM) based outside the US with USD 84 (CHF 81) billion of assets under management (AuM) as of 30 June 2012 and over 2,000 employees, including more than 500 financial advisers. The transaction is a combination of legal entity acquisitions and business transfers, that by the end of the expected two-year integration period, is currently estimated to result in additional AuM of between CHF 57 billion and CHF 72 billion, of which approximately two thirds from growth markets. Assuming CHF 72 billion AuM transferred, Julius Baer’s existing AuM as of 30 June 2012 would increase by approx. 40% to CHF 251 billion and its total client assets to CHF 341 billion, both on a pro forma basis. This acquisition brings Julius Baer a major step forward in its growth strategy and will considerably strengthen its leading position in global private banking by adding substantial scale and additional offices primarily in growth markets, but also in Europe. As part of the transaction, Julius Baer and Bank of America Merrill Lynch (BofAML) have agreed to enter into a cooperation agreement whereby BofAML will provide certain products and services to Julius Baer, including global equity research. In addition there will be cross-referral of clients between both organisations. The acquisition is expected to be earnings accretive from the third full-year following principal closing, i.e. the first full steady-state year following integration. Irrespective of the AuM transferred between CHF 57 billion and CHF 72 billion, the EPS accretion (1) target in 2015 is approx. 15%. The agreed transaction price is 1.2% of AuM transferred (payable as and when AuM transfer to Julius Baer). Therefore, at CHF 72 billion AuM transferred, Julius Baer would pay approx. CHF 860 million. At that level of AuM transferred, the amount of regulatory capital required to support the incremental risk-weighted assets is expected to amount to approx. CHF 300 million, and the total restructuring, integration and retention costs in connection with the necessary transfer of the business to the Julius Baer platform are expected to amount to up to approx. CHF 400 (after tax CHF 312) million. Separately, Bank of America (BofA) will assume up to an additional CHF 121 (2) (USD 125) million of defined pre-completion restructuring and integration costs.[12]

In July 2014 Julius Baer announced that it had purchased the private banking assets of Israeli Bank Leumi. Baer is buying Leumi's private bank in Luxembourg and Leumi will also transfer the clients of its Swiss private bank to Baer.[13]

Subsidiaries and associations

GAM Holding AG

Global Asset Management (GAM) is an independent asset management business borne out of the separation of Julius Baer in September 2009 and is listed on the SIX Swiss Exchange, with a global presence, employing over 1,000 staff in 11 countries. GAM Holding AG comprises the distinct but complementary businesses GAM and Swiss & Global Asset Management. GAM Holding AG offers a diversified range of investment products and services to institutions, intermediaries, private clients and charities.

Julius Baer Foundation

The main focus of the Julius Baer Foundation is on youth. Projects that directly benefit the younger generation are sponsored in various ways.

Controversies and lawsuits

In February 2008, Bank Julius Baer filed a lawsuit (Bank Julius Baer v. WikiLeaks) against WikiLeaks in a federal court in California and obtained a permanent injunction disabling the website wikileaks.org, which was subsequently overturned as a violation of freedom of speech.

Alex Widmer, the chief executive of Bank Julius Baer, died suddenly on December 4, 2008. News reports cited sources indicating the death was a suicide.[14] Hans de Gier, the former chief of Julius Baer Group, assumed Widmer's responsibilities for the interim.[14]

In May 2009, Boris F. J. Collardi assumed the role as CEO for the Julius Baer Group Ltd. and Bank Julius Baer & Co. Ltd.

On January 16, 2011, former Julius Baer employee Rudolf Elmer announced that he would be handing over to WikiLeaks bank account details of individuals and corporations holding offshore accounts that indicates corruption inside the bank such as massive tax evasion.[15]

In February 2016, Julius Baer reached a $547 million settlement with the United States Department of Justice to avoid prosecution related to investigations of aiding US citizens in committing tax evasion.[16]

See also

Notes and references

  1. 1 2 Julius Baer Group Business Review 2013 as at 3 February 2014
  2. ↑ 1890-1990 Eine Familie und ihre Bank, 1990 Bank Julius Bär, Zurich
  3. ↑ "Hans J. Baer, It's not all about money, Memoirs of a private banker, Beaufort Books, New York, 2008, Prominent members of the Baer Families, Biographical Sketches"
  4. ↑ Annual Report 2012 Julius Baer, page 16
  5. ↑ Offering memorandum Julius Bär, November 11, 2005
  6. ↑ Financial Times, January 17, 2005
  7. 1 2 "Global Private Banking Benchmark 2014 - Scorpio Report". scorpiopartnership.com.
  8. 1 2 Merrell, Caroline (6 September 2005). "Julius Baer snaps up UBS private banks for £2.5bn". The Times. London. Retrieved 2009-02-22.
  9. ↑ "Today In Business: UBS Sells Julius Baer Stake". The New York Times. 26 May 2007. Retrieved 2009-02-22.
  10. ↑ de Sa'Pinto, Martin (1 October 2009). "Julius Baer splits operations, unlocks value". Reuters. Retrieved 2010-03-26.
  11. ↑ "Julius Baer strengthens its long-term position in Italy and forms strategic partnership with Kairos – new private bank to be set up jointly".
  12. ↑ "Julius Baer to acquire Merrill Lynch's International Wealth Management business outside the United States from Bank of America, with strong focus on growth markets".
  13. ↑ Financial Times, 22 July 2014, p. 16.
  14. 1 2 Reid, Katie (December 5, 2008). "Bank Julius Baer CEO dies unexpectedly". Reuters. Retrieved 2008-12-06.
  15. ↑ Ed Vulliamy (January 16, 2011). "Swiss whistleblower Rudolf Elmer plans to hand over offshore banking secrets of the rich and famous to WikiLeaks". Guardian. Retrieved January 17, 2011.
  16. ↑ "Julius Baer signs final deal with the US". Swissinfo.ch. February 5, 2016.

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