Swiss wealth manager Lombard Odier sets up private banking structure in Brazil

RIO DE JANEIRO, BRAZIL – The development of the capital and investment market in Brazil as well as the explosion of tech startups and IPOs with all the new young millionaires that come along with it has attracted the attention of foreign wealth managers.

The Swiss, in particular, are showing a willingness to capture a piece of the growth that is emerging with the greater trend of internationalization of Brazilians amid historically low-interest rates.

The French writer and philosopher Voltaire created more than 300 years ago the saying, “…if you see a Swiss banker jumping out of the window, jump after him. There is money to be made….”

The fact that especially the centuries-old and noble Swiss private bankers are currently finding their way to Brazil speaks volumes for many in the wealth management industry. On Lake Zurich and Lake Geneva’s waters, people seem to believe that there is a lot of money to be made in Brazil very soon, and therefore they are positioning themselves early.

After the private bank, Vontobel signaled that it is putting together a distribution partnership in the country, now it is Geneva-based Lombard Odier, with more than 220 years of experience and the equivalent of US$350 billion in assets under its umbrella, which will set its feet here.

The institutions come in the wake of other Swiss banks that have long been established in Brazil, such as Credit Suisse, UBS, and Julius Baer, but with different ambitions.

Lombard Odier already operated in Latin America, but with the arrival of Matteo Dignola to lead the region in 2019, coming from Intesa Sanpaolo, the growth strategy was redesigned. The idea is to bring the institution’s global competencies with greater proximity to customers, says the executive. He will remain at the base in Geneva, and a group of bankers was selected to work in the São Paulo office. The leader of the local operation is yet to be defined.

The securities advisory license was obtained at the end of last year from the Securities and Exchange Commission (CVM). With the Central Bank (BC), the group formalizes authorization for a representative office in the country, which in the future will allow it to take other steps here. As a “partnership” that only assists in constructing investment portfolios, there are no plans to rival the large Swiss groups already in Brazil.

“We don’t compare ourselves to the competitors. With multiple activities in Brazil, the global players do not focus only on private banking, and others tend to grow through acquisitions,” says Dignola. Marc Lopez, partner and chief executive of the South European and Latin American bloc, adds that as an independent private banking institution, “we are not distracted like many listed companies, and so we can spend all our time advising, in personal relationships, and with solutions tailored to each client.”

To enter a market that has giant competitors in the private banking area – Itaú Unibanco, with more than R$600 billion, or Credit Suisse, with about R$350 billion – Lombard Odier’s bet is on an independent private banking brand, positioning itself as a reference investment boutique for Brazilians, says Lopez. The target is investors with at least US$1 million to invest.

One of the areas of great potential, according to the executive, is investments in private equity funds and alternatives with a social, environmental, and governance (ESG) bias, an approach that the Swiss group has been applying for three decades, even before it became fashionable: “With teams dedicated to private equity, we can offer various solutions, based on long-term investment goals.”

The prospect of creating new fortunes also encouraged the Swiss to come to the country. “Brazil is growing in terms of wealth generation. And it will continue to grow based on economic sectors: commodities, industrial sector, domestic consumption, new technologies, and future IPOs,” lists Dignola. “We believe our offering is highly relevant to local entrepreneurs, wealthy families, and senior executives.”

The plan has been around since 2019, and the pandemic has delayed that step. The macroeconomic and political scenario weighed less on the decision, according to Lopez. “We believe in Brazil as one of our main markets, and we have a long-term vision,” he says. He says that despite any volatility or the interest rate hike cycle, the country is a key market, a center of wealth, with a growing demand for wealth management services.

Lombard Odier Group

The Lombard Odier Group is an independent Swiss banking group based in Geneva. Its operations are organized into three divisions: private banking (wealth management), asset management, and back and middle office services for other financial institutions (e.g., banking IT). At the end of 2020, the bank reported outstanding balances managed through these three divisions totaling well over US$350 billion in managed assets, which makes it one of the biggest players in the Swiss private banking sector.

The group was formed in 2002 as Lombard, Odier, Darier, Hentsch & Cie, by the fusion of Lombard, Odier & Cie and Darier, Hentsch & Cie. As the latter was originally founded in 1796, the group has a claim to being the oldest private bank in Geneva. Outside of Switzerland, the bank has branches in the EU (centered in Luxembourg), in London, Moscow, in North America (New York, Boston, Montreal, Bermuda, Bahamas), Latin America (Panama, Uruguay), Asia (Hong Kong, Tokyo, Singapore, Dubai, Tel Aviv) and in South Africa. Including its network of collaborators, the group has around 2,400 employees worldwide.

With information from Valor

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