banking casualties of the crisis is AIG Private Bank, now being
divested by its wounded parent in a huge global programme of asset
sales. UBS has been appointed to run the sale.
American International Group, on the verge of bankruptcy last month
before the Federal Reserve stepped in with an emergency $85 billion
capital injection, will sell this private banking arm in
Switzerland as part of disposal of its asset management division.
The AIG asset management arm AIG Investments had more than $766
billion under management at end 2007.
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AIG Private Bank, based in Zurich, does not disclose balance-sheet
information or size of client assets under management but has a
number of attractions for a buyer, including an international
network featuring several offices in Asia. Its last published
earnings report, for 2004, showed that the bank increased
consolidated gross profit by 28 percent to CHF42.1 million ($37
million). Assets under management rose to CHF14.3 billion from 12.7
billion the prior year. Founded in 1965, the bank operates
branches, representative offices and wealth management affiliates
in Hong Kong, Taipei, Shanghai and Singapore.
UBS declined to comment on its role in the bank’s auction. In
selling AIG Private Bank off, one hurdle could be its joint venture
with Bank Sarasin, called Zweiplus Bank. Sarasin owns most of the
venture and thus is a legal owner. Zweiplus was launched in July as
a Swiss product and settlement platform for asset managers,
independent financial advisers and affluent individuals, mainly in
Switzerland, Germany and Austria. It was designed to serve around
240,000 clients and currently has assets under management of around
CHF8.5 billion, and 140 employees.
AIG and Sarasin have both declared that the insurer’s problems had
not yet caused any knock-on effects at Zweiplus.
UK private client manager for sale
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By GlobalDataMeanwhile, the collapse of Iceland’s Kaupthing has put a
medium-sized UK private client manager on the market – Singer &
Friedlander Investment Management (SGIM).
The firm is part of Kaupthing Singer and Friedlander, the City
banking group now in administration because of its parent’s
problems.
SGIM had about £3.8 billion ($6.8 billion) under management at the
end of 2007.
Stockbroker Collins Stewart and merchant bank Close Brothers are
among bidders to have taken part in initial discussions. Lloyds TSB
has also reportedly shown interest while a management buyout bid is
also understood to have been abandoned.
Administrators for Singer & Friedlander, Ernst & Young,
hope a deal can be struck swiftly before SGIM starts to haemorrhage
clients and key staff. Six private banking staff left the unit on
13 October.
