Vontobel, the Swiss private bank, has inked a deal to buy the North American wealth management portfolio of asset manager Lombard Odier.
The deal includes approximately 700m Swiss francs ($703m) of private wealth management clients based in the US and 600m Swiss francs of private client assets through a Montreal-based, SEC-regulated subsidiary.
Under the agreement, Lombard Odier will sell its existing discretionary and advisory wealth management business with US-based clients through an asset transfer to Vontobel.
The move is Vontobel’s first acquisition in the US, where it has been since 1984. It is also a critical part of Vontobel’s growth plan. The Swiss bank is targeting return on equity of 14% in 2020. Over the past five years it has averaged 12%.
In the US, Vontobel manages $20bn in its wealth management and asset management businesses. About three-quarters of the business is in asset management, which subadvises four Virtus mutual funds, including $7bn Virtus Vontobel Emerging Markets.
The remaining 25% is in wealth management, where the growth rate in the US is much higher than globally. Vontobel wants to deliver 10% annual net new money from its US private wealth operation.
The deal is expected to be completed in the first half of 2019.