Monday, Feb 06, 2012

Gulf News

Dubai Falcon Private Bank, a Swiss private bank owned by Abu Dhabi’s Aabar Investments, sees huge potential for expansion in the UAE and throughout the Gulf, Eduardo Leemann, the bank’s chief executive, told Gulf News in a recent interview.

Falcon, with more than 40 years of experience in Swiss private banking, is specialised in wealth management for private clients, wealthy families and institutional investors. The bank has been present in the region with its Dubai representative office since 2008 and has been owned by Aabar Investments since April 2009.

Following the ownership change, the bank went through a process of realigning its business in terms of geographic focus and the types of clients it wants to serve.

“The last few years we have been going through a strategy shift. We have almost exited the institutional business entirely and several geographical areas. We have also exited more retail based private banking business. Everything below $2 million (Dh7.3 million) has been done away with,” said Leemann.

Strategy for the region

Falcon is currently focused on four major geographical areas: Switzerland, Russia, China and the Middle East. “Over the past few years we have shrunk our Asian business to dedicate more resources to greater China. Now we work on a sharply focused business plan with clear geographical focus rather than tapping opportunities everywhere,” he said.

The bank is clearly interested in business from the wider Gulf region but Leemann admits that so far the bank has had only limited success.

“The UAE itself is a very interesting market that is likely to keep us busy for the next few years. We do have a team out of Geneva that focuses on Kuwait and Saudi Arabia. Saudi Arabia is a very difficult market in terms of the regulatory environment. There are a lot of restrictions on what you can do in Saudi Arabia,” he said.

The bank is looking at a client profile of people with a minimum of $5 million to open an account. That will include ultra high networth individuals, wealthy families, business people and a few family offices.

“We are not going after institutional money. We do have some institutional money from the UAE under our management, but our focus will be largely on private wealth.”

Despite the rising competition in the UAE’s private banking business with a number of new banks setting up shop in the Dubai International Financial Centre and more local and international banks expanding their private banking and wealth management business here, Leemann says there is enough space for Falcon to find substantial business in the UAE. “We are a unique boutique player with significant international presence. This gives us the option to offer a very flexible product line. Of course, we have the great advantage of being a Swiss bank with local ownership. It is a strong statement and people appreciate that. Aabar and IPIC are very well respected names in the region,” he said.

Strong foothold

With a team of investment professionals based in Dubai and Abu Dhabi, Falcon offers investment options within the UAE and the region to its international client base.

In addition to two teams on the ground in the UAE, the bank also has a fixed income team based in Zurich.

“A strong foothold in the region gives us the advantage to offer some great opportunities from the region to our clients in areas such as fixed income and forex related products.”

Major attraction

He said there is growing awareness among international investors of the advantages of investing in bonds and sukuk from the UAE and the wider Mena region.

The huge yield differences between the bonds from the developed world and the region will be a major attraction for global investors to get exposure to quality corporate and sovereign credit originating from the region.

He said in retrospect, Dubai’s debt issues in 2009 gave a huge awareness of Dubai and the UAE among international investors and that has helped investors to look for opportunities here.

In the current investment environment, Leemann said there is a clear shift towards fixed income and emerging markets equity.

With no end in sight to the debt crisis in Europe, in relative terms he said he expects US and emerging market equities to perform better.

In 2012 emerging markets will be a comeback story for international investors looking for returns.

For a classical high networth Gulf investor he recommends emerging market fixed income with the core in local fixed income bonds, sukuk and the remainder should be devoted to emerging markets.

By Babu Das Augustine Deputy Business Editor

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