Mirabaud

Anglo-Saxon model

With operations in London, Paris, Montreal, Barcelona, Zurich and Geneva, Mirabaud Asset Management's offering comprises active management of equity funds (Switzerland, UK, France, Spain, Europe, North America, Asia, emerging markets and global) which favour alpha generating strategies; bond management, including convertible bonds and global high yields, alternatives and dynamic asset allocation products.

Yves Mirabaud says the Swiss industry could learn from the "Anglo-Saxon" model.

"Swiss private banks have to up their game as there has been a generation of weak performance. Their approach is often too macro, we need to shift more to the Anglo-Saxon way."

Given "the situation from the past" (Switzerland's culture and history of banking secrecy), and the resulting regulatory pressures, as well as the uncertain economic outlook, all managers face significant challenges.

"Because of the situation from the past, the industry is under huge pressure. We have to find a solution and that takes time.

"Additionally, Switzerland is not a member of the EU so we don't have open access to the market. We need a bilateral agreement with the EU, or Swiss banks will have to develop business in markets like Eastern Europe, the Gulf and emerging markets, where perhaps the tax issue is not as important as the investment process."

He suggests that the global furore over US whistleblower Edward Snowden's leaking of National Security Agency surveillance of citizens "shows that protection of the private sphere is still important". 

"The Swiss proposition is very strong in this respect. We have a strong, stable economy and real banking and investment expertise. There is real demand for confidentiality, which is not secrecy, and protection.

"It is not the taxman that worries the wealthy. It is the protection of their family."

Such pressures inevitably raise the question of consolidation within the private banking sector, which Mirabaud admits is feeling the squeeze.

"The balance sheet is not paying anything and business volumes are extremely low but we still have to invest, to hire and build the business, while taxes are higher."

Meanwhile, the continuing flow of compliance requirements represents a rising cost with no revenue generation. Margins are therefore under pressure even if markets are better this year. In general, client "stickiness" or loyalty is a little less than it has been, although it remains higher in Europe than in Asia, where notoriously high manager churn makes for volatile business revenues.

European difficulties

Mirabaud says despite slowing economic growth, emerging markets are still attractive, while Europe remains very difficult, with real doubts now about the French economy, not just the eurozone periphery nations. 

"The ECB (European Central Bank) and (president Mario) Draghi made a very timely move last summer which turned around the situation and the mood to be more positive," he says.

"We hear that the cycle has reached the bottom but the ordinary citizen clearly doesn't feel that. There will be no serious growth for the next three years, and the extreme measures taken still have to unwind. It is not sustainable that the state stands behind every debt."