What is your Swiss connection?
I was born and grew up in Switzerland and I started in corporate banking at Citibank in the late ’70s. I created the first venture capital fund there, tailor-made for high net-worth individuals. One of the first investments was Starbucks.
When I left Citibank, I set up my consultancy business in 1995, ran into Eric Sturdza, who was at Citibank with me, and who in 1986 had set up Barings in Geneva as a subsidiary of Baring Brothers.
I joined three months before the crash with an idea of helping Eric to establish some funds. The idea was that being part of Barings, we were very oriented towards the Far East, in particular Japan.
"We do all the structuring and the legal side, and the portfolio manager runs his own show but is working exclusively for us"
In 1996 we set up our first Japan fund, which was not really a fund but an internal portfolio of the private bank.
Our goal was to serve our private clients in a more systematic way and to make use of local specialists.
That was the beginning of our business model. We had exclusive contracts with independent asset managers. We would market the funds with our portfolio manager and they would be the investment adviser.
This is still the basis of our model today: we do all the structuring and the legal side, and the portfolio manager runs his own show but is working exclusively for us.
The advantage is that fee split, of course. This has proved a win-win situation because it enables the portfolio manager to focus on what he does best and not worry about the administration or going to meetings.
We set up a company in Guernsey, a funds company in 1999, which is autonomous from the private banking group.
The Guernsey company is the asset management company. The UCITS funds are domiciled in Dublin and the business trades as EI Sturdza Investment Funds out of London.
What influence does the parent company have on the business?
The main contribution of the parent company is that we have seeded new funds with our own clients.
We have two banks in Switzerland where we hold the majority of our assets. The total assets under management is about CHF10bn ($11bn), of which about CHF3bn are in funds.
The biggest fund, at this moment, is the Europe Value Fund, which has risen from nothing in the past four years to more than €500m ($562m), and it is growing very fast. Our parent company is our biggest client still, but it is a minority percentage.
We have a board in Guernsey and we are under consolidated supervision of Finma, which is the Swiss supervisory body. To that extent, I report not only to the board but also to the executives in Geneva.
All the funds have the administration and custody in Dublin, except for two Guernsey funds, which are hedged products not marketed by EI Sturdza Investment Funds. The UCITS funds domiciled in Dublin are marketed/distributed via EI Sturdza Investment Funds.
The management company in Guernsey, as a subsidiary of the bank, falls under the umbrella of the group, which is supervised by FINMA, but not its Irish-domiciled funds.
How do you select which types of clients to do business with?
Our main focus is still in Europe. You need to register the usage in every single jurisdiction, which now has become a much simpler process under UCITS IV.
We target wholesale and institutional clients. We have a whole range of clients from private banks to funds for family offices to pension funds. We are on the UBS and Allfunds platforms, and on a couple of platforms in Germany as well.
