What is banker Juerg Zeltner up to at KBL? finews.asia outlines the six- to eight-year plan emerging – a bid by Qatar to recoup some of its $1.2 billion investment in the bantam wealth manager.
Juerg Zeltner is poised to officially unveil his new strategy and identity for KBL early next year. The 52-year-old Swiss veteran is partnering with Qatar’s ruling family to revive the 72 billion euro ($80 billion) Luxembourg-based wealth manager, as finews.asia reported.
The move is the culmination of more than one year of work orchestrated by Zeltner, UBS’ top private banker until 2017. He enjoys a direct and close relationship to influential members of the al-Thani family dating back to his UBS days, according to a person familiar with the matter. He put down his own money, and tapped Qatar for a cash injection.
«Attractive» Profit Share
The Luxembourg structures around KBL are multi-layered, but the bottom line is that the al-Thanis, who have ruled Qatar since its founding in 1850, still own 99.9 percent of the wealth manager. According to industry observers, Qatar has likely settled in for at least six to eight years with Zeltner at KBL. Observers expect at least two years of losses before Zeltner can begin to show the fruits of his labor.
Zeltner, wealth head Jakob Stott, and operating chief Colin Price invested in a first vehicle, Pioneer. «Partners» like ex-UBS private banker Søren Kjær and Swiss boss Dagmar Kamber-Borens have taken what one person familiar with the matter termed an «attractive» equity earn-out in a separate structure.
What is Qatar’s long-term plan? The al-Thanis bought KBL from troubled Belgian bank KBC in 2011 for 1.05 billion euros. It is undoubtedly worth less than that now – and thus the expansion push can be viewed as an effort to squeeze more value out of KBL.
«Incentives Needed»
After two years of self-imposed time-out, Zeltner is clearly putting the UBS band back together, as finews.com reported. He has assembled erstwhile deputies and colleagues around him as he embarks on what several sources say is a several hundred million dollar expansion bid.
«The focus has definitely been on the front office, where a certain incentivization is needed to persuade people to come over,» a person familiar with the matter said. Many have heeded the call: In recent months, KBL has hired UBS bankers including Swiss risk expert Thomas Siegenthaler, product co-head Bryan Crawford, and Gonzalo Alvarez Conde, a Spanish private banker for the ultra-rich.
Zeltner and his wealth boss, Jakob Stott, have even hired their respective UBS secretaries as well as an expert on glitzy events for UBS' super-rich clients. KBL has also poached from rivals: the bank hired Swiss-based J.P. Morgan veteran Fanny Lavigne last month. A spokesman for KBL confirmed the hires.
Swiss «Base Camp»
In five months, KBL bought a Swiss bank and set up a «base camp» in Zurich run by Kamber-Borens (pictured below). KBL will move into prestigious Bahnhofstrasse offices before the deal closes early next year.
All told, KBL aims to hire several dozen «partners» in its expansion bid. The bank currently employs roughly 2,000 people, which isn’t expected to bulge considerably, one person said. However, the expansion push means KBL will shift resources away from Luxembourg, where currently more than one-third of staff are based.
KBL plans to expand into the Middle East as well as Asia after rounding out Switzerland and the Nordics, according to two sources familiar with the matter. The how and when of a potential move isn’t yet clear, the people said – and KBL looks likely to primarily pick up bankers and teams, and not aim to build local booking platforms.
Homegrown Woes
Zeltner also has several homegrown problems: the most pressing is loss-making subsidiary Merck Finck. The 149-year-old German private bank's assets recovered to 10 billion at mid-year, after hiring 30 new private bankers, a spokesman for Merck Finck told finews.asia.
To be sure, KBL and other foreign-owned European private banks have already tried to do what Zeltner is now undertaking – but on a considerably shorter timeline. Through its sovereign wealth fund, Qatar owns sizable stakes in Credit Suisse and Deutsche Bank, and has also snapped up assets including London landmark the Shard and Harrods department store.
Qataris in Driver's Seat
An embarrassing setback last month illustrates the boundaries of the alliance – and who is in the driver’s seat. Led by Sheikh Tamim bin Hamad Al Thani, the family had dispatched Zeltner to Frankfurt to help oversee their investment in Deutsche Bank.
He left after just two months after German regulators threatened to nix the move. The Deutsche back-and-forth aside, Zeltner likely has more time to spread his wings in Luxembourg.
