Ex-Glencore Trader Taps African Wealthy for BordierGiles Broom
Khalil Marcos, head of Geneva-based Bordier & Cie.’s Africa desk, says he is using the contacts he made during 20 years as a commodity trader to attract millionaire private-banking clients on the continent.
Since joining Bordier from Credit Suisse Group AG in 2011, Marcos has used a network developed while trading wheat, corn, rice and sugar at Glencore International AG and Cargill Inc. to build the bank’s managed assets for Africa to about 300 million Swiss francs ($336 million). Marcos says he doesn’t join rivals touting for clients at events in hotels or cherry-picking the Swiss ambassador’s contact list. He is more discreet.
“I use my network,” Marcos, 52, said in an interview at Bordier’s office in Geneva’s old banking quarter. “Word of mouth is a banker’s best friend in Africa. If you do well for a community or a person, then he will recommend you.”
Gregoire Bordier, from the fifth generation of a family who provide three out the firm’s four managing partners, is hiring client advisers as his bank bids to more than double assets in Africa over the next two years. Inflows from faster-growing emerging markets helped the 170-year-old wealth manager counter withdrawals in western Europe last year as a crackdown on tax evasion pushes American and European customers to pull money from offshore Swiss accounts.
“We’re focusing on the sub-Saharan African market as that’s where the growth is,” said Bordier, whose bank had more than 10 billion francs under management at the end of December. “We’re looking to build this team.”
The number of African millionaires surged 9.9 percent to 140,000 in 2012, according to a June report by Capgemini SA and Royal Bank of Canada. That was the fastest rate of increase outside North America as the economies of countries such as Nigeria and Ghana grew at more than 5 percent in 2012. Millionaires in Nigeria, Kenya and Angola will more than double by 2030, boosting the prospects for private banking on the continent, New World Wealth, a U.K.-based research firm, said on Dec. 3.
Foreign investment in land, agriculture and commodities is helping to increase wealth in sub-Saharan Africa, after China invested “heavily” in the region, said Bordier, who oversees about 220 employees. Foreign direct investment in Africa rose 5 percent to $50 billion in 2012, bucking a global decline, the United Nations Conference on Trade and Development said in June.
While Africa’s richest man, Aliko Dangote, is ranked 24th in the Bloomberg Billionaires Index with $25.1 billion, Bordier is targeting individuals with $1 million to $6 million to invest.
“We’re focusing on small entrepreneurs,” said Marcos, whose family came from Lebanon, before settling in West Africa. “We’re not after Africa’s billionaires.”
The bank is tapping wealth made in industries from commodities to telecommunications, while avoiding rich politicians who bring due diligence risks, according to Marcos, who worked at Glencore from 1994 to 1997 in South Africa. Bordier’s clients include affluent individuals among the Lebanese, Pakistani and Indian diaspora living in African cities, he said.
Bordier has clients in Ivory Coast, where Marcos grew up, and across West Africa in Nigeria, Ghana, Burkina Faso and Senegal. Other customers come from the Democratic Republic of Congo, Uganda, Kenya, Tanzania, and Mozambique, said Marcos, who is the firm’s first banker dedicated to Africa and worked at Cargill in Geneva from 1997 to 2004.
Tourism in Kenya generates annual revenue of almost $2 billion, making safari lodge developers and hotel owners in Nairobi and along the coast potential clients, according to Marcos. Tea exports and oil discoveries are also boosting private wealth in the country, he said.
“You are going to see more entrepreneurs coming and building up businesses from commodities.”
Bordier said his firm, which opened an office in Uruguay in 2007 and another in Singapore in 2011, is avoiding “over-banked” North Africa where competition is more intense. The bank won’t send advisers to countries with tight foreign-exchange controls and restrictions on nationals remitting funds abroad, such as Ethiopia.
UBS AG, HSBC Holdings Plc and Barclays Plc are among the wealth managers competing for African entrepreneurs and individuals enriched by the sale of stakes in family-owned businesses. Standard Chartered Plc, which has operated in Africa since the 1860s, has more than 180 bank branches on the continent.
Bordier, which has a presence in Paris and London, doesn’t have a branch network in Africa and won’t establish representative offices on the continent, Marcos said. African clients usually transfer money to Geneva where investment managers allocate funds in different currencies to equities, bonds and other asset classes, according to Bordier.
Funds may also be entrusted to partner banks in London, especially if customers need money in the U.K. to buy property or pay school fees, according to Marcos. While Africa is a “land of opportunity,” there are challenges, he said.
“Marketing is difficult in Africa,” said Marcos. “It’s a difficult place to travel in. It’s not like going to London or Paris and the relationship managers going to Africa must like the continent.”