Julius Baer Agrees to Raise Stake in Italy's Kairos to 80%

  • Companies agree to pursue Kairos listing on Italian market
  • Kairos assets under management almost doubled since 2013

Julius Baer Group Ltd., Switzerland’s third-largest wealth manager, agreed to buy a majority stake in Milan-based Kairos Investment Management SpA from its managers to boost assets it oversees in Italy.

The private-banking group is raising its holding to 80 percent from 19.9 percent, the companies said in separate statements Monday, without disclosing the price. The transaction is expected to close in 2016 and the companies have agreed to pursue a listing of Kairos on the Italian stock exchange.

“The partnership between Julius Baer and Kairos has proven to be a powerful force in the Italian wealth-management sector, surpassing our expectations when we started this journey in 2013,” Julius Baer Chief Executive Officer Boris Collardi said a statement.

As the private-banking industry shrinks, Collardi has said he’s interested in making further acquisitions. The Swiss company has set aside $350 million for a potential U.S. penalty over its role in helping Americans hide untaxed assets in Switzerland.

The Swiss private bank with about 297 billion Swiss francs ($295 billion) of assets reported a decline in gross margins as of the end of October and said net client inflows were below the firm’s medium-term target of 4 percent to 6 percent.

Initial Stake

Chairman Paolo Basilico founded Kairos in 1999 and owned the company with 20 other managers. In 2013, Julius Baer bought the initial stake with an option to increase it. After the latest purchase, the current Kairos management team led by Basilico will continue to run the business and will maintain “a relevant stake” after the shares trade, the company said.

At the time of the transaction announced Monday, the Italian company’s managers owned 80.1 percent of the company with Julius Baer holding the rest, a Kairos spokeswoman said.

Kairos has almost doubled its assets under management to 8 billion euros ($8.6 billion) since the initial stake was bought by Julius Baer, the Swiss company said.

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