Marco Illy, a well-known investment banker, is lining up his next deal, finews.asia has learned. The move comes nearly a year after the ex-Credit Suisse heavyweight left his job. 

At nearly 59, Marco Illy is too young to retire after his last career move – from Credit Suisse to arch-rival UBS – fell through last year. Since then, Illy has been looking into taking over a private bank in Switzerland, finews.asia has learned from several people familiar with the matter.

Together with a small group of investors, Illy is relatively far along in the takeover of Degroof Petercam (Suisse). One of his co-investors is a small finance boutique. Illy and the investors have already conducted due diligence on the bank, the Swiss subsidiary of a Brussels-based financial firm of the same name, another person said. The deal may be inked shortly, this person said.

Swiss Management to Stay

Illy didn't comment to finews.asia, nor did Degroof Petercam. The Belgian group has been looking at options for the Swiss arm for roughly two years, a third person told finews.asia. In an initial step, the family-controlled bank was looking to shop a minority stake of 30 percent – a prospect which found few takers.

Illy presented a plan which seems to have won over Degroof Petercam's management in Geneva: full control while preserving independence. The continuity of Degroof Petercam's modest private banking business would be secured, and management under CEO Cédric Roland-Gosselin would stay in place and hopefully keep clients on board too.

Small, But Profitable

The offer wasn't immediately welcomed in Brussels, the people said: the parent bank would have preferred a sale to another Swiss bank. Ultimately, the fear of losing management and clients in Switzerland prevailed, and parent Degroof Petercam agreed to talk.

With 1,400 employees and 63 billion euros ($70.8 billion) in funds in asset management and private banking, Degroof Petercam is the largest independent finance institute in Belgium. In Switzerland, the name is mainly known for asset management products.

Its Swiss private bank is minuscule but profitable: it recorded a 1.3 million Swiss franc ($1.3 million) profit last year on roughly $1 billion in assets. After the merger of family-owned Degroof and Petercam in 2015, the Swiss subsidiary was meant as the third pillar after Brussels and Luxembourg.

Reversal of Strategy

CEO Roland-Gosselin in 2016 drew a contrast to other foreign banks in Switzerland, saying Degroof Petercam was looking to bulk up, not shrink. He noted that the Swiss arm would reinforce by hiring, and by taking an active role in mergers and acquisitions.

Two years on, little is left of the ambition: the Swiss bank employs less than two dozen people, and last year suffered withdrawals not related to market swings. Revenue tanked, in part as retrocessions on its own fund products fell away. Banque Degroof Petercam's profitability in Switzerland is likely mainly due to a lucrative real estate business.  

Parallel to KBL-Bellevue

The pattern of Swiss private banks losing support within wider financial institutions isn't entirely new. Zurich-based Bellevue Group is in advanced talks to offload its wealth management bank to Luxembourg's KBL, where former UBS heavyweight Juerg Zeltner took a stake and will soon become CEO.

Illy appears poised to conclude a similar deal. The investment banking veteran seems to feel the appeal of becoming co-owner of an existing bank outweighs the effort required to build a Swiss wealth manager from scratch.