Edgar de Picciotto, Hedge-Fund Pioneer, Dies at Age of 86

  • Lebanese banker built Geneva-based UBP via hedge fund ties
  • De Picciotto, UBP chairman, saw hedge fund potential early

Edgar de Picciotto, the founder and chairman of Union Bancaire Privee who was one of the the first bankers to advocate investment in hedge funds decades ago, has died. He was 86.

He died Sunday after a long illness, Bernard Schuster, a spokesman for the Swiss bank, said in an e-mailed statement Monday.

Edgar de Picciotto
Edgar de Picciotto
Source: SBM/Realis via Getty Images

A native of Lebanon, he founded Compagnie de Banque et d’Investissements in Geneva in 1969, one of the first companies to recognize the potential of hedge funds for investors looking for ways to make money in both rising and falling markets. In time, the Swiss bank grew into the world’s largest provider of capital to hedge funds and remains one of the biggest funds of hedge funds.

De Picciotto was a “visionary and ahead of his time in asset management and international Swiss banking,” said his longtime associate Ray Soudah, founder of Millenium Associates, a Swiss company that advises banks on deals. “He will be warmly remembered and greatly missed as an irreplaceable icon of the industry and a gentleman."

Biggest Merger

CBI started its first multi-strategy fund of hedge funds in 1986. He quadrupled the business in 1990 with the takeover of American Express Bank. The biggest bank merger ever in Switzerland at that time, it gave birth to UBP, the bank said.

The Geneva-based bank was No. 20 in Preqin’s latest ranking of fund of hedge-fund managers, based on assets under management. It was the ninth-oldest recorded by the research company, which specializes in alternative assets.

“He was a charismatic leader, driven by his family’s values and always looking to the future,” Schuster said in the statement Monday. “He will leave a deep personal imprint on UBP, which he made into one of the greatest family-owned banks in the world.”

Assets slumped in the years after the financial crisis, with withdrawals magnified by client losses of about $700 million from the 2008 collapse of Bernard Madoff’s Ponzi scheme. In 2010, UBP agreed to pay as much as $500 million to settle claims by the trustee liquidating Madoff’s bankrupt investment firm.

Major Consolidator

Acquisitions have helped the bank regain market share in recent years. Since 2011, the bank has purchased the Swiss subsidiary of ABN Amro Group NV, the private banking business of Lloyds Banking Group Plc and the overseas operations of Royal Bank of Scotland Group Plc, known as Coutts International.

UBP had 110 billion Swiss francs ($111 billion) in assets under management at the end of 2015, compared with 72 billion four years before. In January, the bank agreed to pay almost $188 million as part of a U.S. amnesty program for dozens of Swiss banks that helped Americans evade taxes.

The bank employs 1,300 people and operates in more than 20 locations around the world, according to its website. De Picciotto’s son, Guy de Picciotto, has been the bank’s chief executive officer since 1998. Two other children sit on the board -- his son, Daniel de Picciotto, and his daughter, Anne Rotman de Picciotto.

The family had a fortune of about 2.3 billion Swiss francs at the end of 2015, the Swiss magazine Bilanz said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE