The UK has continued to attract foreign banks to set up shop in London, countering the doom and gloom in the wider eurozone. PBI talks to Berenberg’s Ross Elder about its long-term approach, hiring plans and openings in New York and Amsterdam
German banks have reined in their private banking business in recent years. Commerzbank (née Dresdner) is a shadow of its former self, while Deutsche Bank is downscaling its asset and wealth management businesses, including its Sal. Oppenheim offshoot. Amid this retrenchment, there are some worthy candidates from Germany to fill the vacuum, not least several institutions in Hamburg.
They include Joh. Berenberg Gossler & Co., ranked as Germany’s oldest private bank, which is now briskly looking for growth outside Germany.
Berenberg boasts a manager liability model which it proclaims limits risk. In an view which could be straight from London’s C Hoare & Co, which maintains a similar partnership model, Berenberg managing partner Andreas Brodtmann, in charge of private banking says: “We work with a strategic view of 10 to 15 years and don’t focus just on today’s profit.”
Berenberg is now looking to up its profile in Britain after taking a private banking presence in the City early last year. The bank has awarded a retained brief to MHP Communications to raise the profile of its UK private and investment banking operations. This campaign will stress its principles of socially responsible banking and the benefits of its private-owned partnership structure.
Berenberg claims to be one of Europe’s most highly regarded private banking houses, with assets under management totalling 26bn. Apart from its venture into London, the bank is also looking at opening in New York and Amsterdam, after starting an office in Geneva and a subsidiary office in Boston in 2011.
Ross Elder, co-head of Berenberg’s UK private banking, confirms that the bank in London is “continuing to look for high-quality private bankers for the UK market as well as the resident non-domiciled space, where we focus on individuals who have run money before and understand risk and asset allocation, as opposed to only relationship managers.”
“We do not buy businesses or hire teams, so we continue to look for opportunities as we meet the right people,” he adds.
So far, the London private banking team has been built up to 10 people, and the bank expects to take on a select number of bankers in 2013.
The Berenberg strategy, according to Elder, is based on a combination of discretionary management for liquid assets and advisory for longer term less liquid investments and opportunistic trading ideas.
As for clients, services start at what he calls “genuinely high net worth, and we look for those with £3m of investible assets”.
Elder continues: “Since we take a long-term approach with our clients, we do not necessarily expect this minimum right from the start, as we may be working with an entrepreneur we are supporting in their pre-sale stage, or a hedge fund manager growing their wealth. Also, in this environment, more and more clients want to test us out first before they commit all of their money.”
The bank prides itself in offering a bespoke service to clients. “With 1,100 employees globally and 150 in our London office, we are able to engage with each client on an individual basis, tailoring our services to their individual preferences,” says Elder.
“For some, making the final investment decision themselves is paramount. For others, we offer access to expert advisers and a sophisticated, diverse asset range. Increasingly, individuals like to take an active interest in their portfolios and we believe we have one of the most contemporary, innovative and relevant offerings in the business.”
Safety in numbers
The Berenberg man asserts that in combining its core offering with access to one of the biggest equity research platforms in Europe, “we offer our clients the opportunity to take an active role in choosing how best to safeguard their wealth.
“We have focused on good-quality thematic ideas, throughout our history, and our art advisory and classic cars divisions are examples how we enable our clients to combine their passions with the need to manage their wealth.”
Elder adds: “Our unlimited-liability partnership model, the continued family involvement, our high core capital ratio and our membership of the German Deposit Protection Scheme protecting clients’ assets up to an amount significantly higher than the Financial Services Compensation Scheme all mean that we are an obvious home for hard-earned funds.”
He continues: “We are winning mandates where our focus on getting the asset allocation right is a clear advantage. Also we operate in an environment where clients start to think about their wealth in an inter-generational way.”