Julius Baer Group Ltd., the third-largest Swiss wealth manager, agreed to acquire WMPartners Wealth Management Ltd. for an undisclosed sum to merge with its Infidar Investment Advisory Ltd. unit.
Julius Baer plans to integrate the two asset managers to create a company with 50 employees, overseeing more than 4 billion Swiss francs ($4.4 billion) of client funds, the Zurich-based bank said in an e-mailed statement today.
“The new company will remain completely independent with regard to investment decisions and choosing its custodian banks,” Yves Robert-Charrue, head of independent asset managers and global custody at Julius Baer, said in the statement. “At the same time, it will be able to handle the increasingly complex requirements that we are seeing nowadays.”
Switzerland is tightening regulation of its 2,500 independent asset managers, prompting companies to consider mergers to pool costs. Independent advisers, which provide investment advice to wealthy people who deposit assets with the nations’ banks, oversee an estimated 600 billion francs, according to the Swiss Association of Asset Managers, which has more than 1,000 members.
Julius Baer fell 0.6 percent to 41.60 francs as of 12:05 p.m. in Zurich, paring this year’s advance to 29 percent. The bank declined to comment on regulatory matters or on WMPartners’s financial performance, when contacted by Bloomberg News by phone today.
The Swiss market will have fewer, larger and directly regulated independent asset managers, Robert-Charrue told newspaper Finanz und Wirtschaft on Nov. 9. Regulation will cost more and uncertainty over the details of new financial-services legislation is “bad for business,” he said.
Some independent asset managers opt to join a self-regulatory industry association instead of being directly regulated by the Swiss Financial Market Supervisory Authority, or Finma. The government plans to publish a draft financial-services law in the first half of next year, which may extend Finma’s oversight over those managers and introduce new investor protection rules.
“It’s a logical conclusion there may be mergers given the rising costs facing the industry,” Patrick Dorner, director of the Swiss Association of Asset Managers in Geneva, said in a phone interview, without commenting specifically on Julius Baer’s purchase. “So far this hasn’t happened.”
Julius Baer owns a majority stake in Infidar, which was established in 1954 in Zurich. The combined company will be run by Heiner Grueter, chief executive officer of WMPartners, according to the statement.
Julius Baer, which provides custody accounts, access to investment products and loans, as well as trading and tax-planning services to external asset manager clients, expects the transaction to be completed in the first quarter of 2014.