This publication interviews the head of the external asset managers desk at the Swiss bank about its work in the EAM space and the qualities which it says give it an edge.

Luca De Donno, head of the EAM desk at Hyposwiss Private Bank Genève SA, talks to this news service about the Swiss firm’s achievements and the qualities that it intends to continue developing.

(View our awards programme for EAMs in Switzerland.)

Hyposwiss Private Bank Genève SA is a family-owned Swiss private bank which partners with its clients to help them achieve their financial objectives. The approach is based on the principle of “Ease of Doing Business,” i.e. providing value added services to clients in a pro-business environment made possible by having strong financial metrics, a disciplined governance framework and high moral and ethical standards.

Hyposwiss champions the values of integrity, which creates trust, excellence, which creates performance, responsibility, which leads to sound decision-making and respect, which fosters a positive dialogue with staff and clients.

The Hyposwiss approach is underpinned by a disciplined adherence to rules and regulations in Switzerland and abroad with the aim of facilitating client business by always doing things the right way the first time. Hyposwiss’ bankers are supported by a management team that focuses sharply on the bank’s clients and staff.

The growth strategy of Hyposwiss is two-pronged: organic growth generated by pro-active bankers with strong client relationships on the one hand, and sourcing and seizing attractive acquisition opportunities on the other.

Hyposwiss serves clients in Switzerland, many of whom have come from abroad to settle here, and a diverse international clientele in Israel, Latin America, Europe and the UK as well as Russia and the Middle East. It also caters to US and Canadian clients through its subsidiary Hyposwiss Advisors SA, a Swiss wealth management company licensed by FINMA and registered in the US and Canada.

Hyposwiss has strategic partnerships with Sygnum Bank, the Zurich-based blockchain bank, and a participation in a successful Monaco-based subsidiary, Monaco Asset Management.

How important to the firm’s overall business is the EAM space? 
The EAM business has always been an important segment for Hyposwiss backed by a strong commitment from its management. Indeed, before the bank acquisition by the Mirelis Group in 2014, several members of the executive team were themselves specialised in external portfolio management through Mirelis InvestTrust SA, an EAM company founded in 1997. Therefore, the EAM business is very much in the DNA of the bank. The management understands and supports the development of the sector and is always available to meet new prospects and existing partners. The revenues generated by the EAM business are growing each year and today represent about 10 per cent of the overall revenues of the bank.

How long has HS been working in the EAM space? How many people are dedicated to serving it?
The EAM department was created in 2012 when I joined Hyposwiss. Today we have a dedicated team of four people with a longstanding experience in this segment. We have agreements with more than 50 EAMs, mainly in Switzerland, but also in Israel and the UK.

Basically, all the operative tasks are centralised in the department in order to optimise efficiency and minimize risk, but Hyposwiss also allows for personal relationships with dedicated relationship managers (for example for cultural or language reasons). 

The EAM industry faces lots of changes because of new Swiss regulations. What are the main challenges you see for the EAM sector? How does the business help firms with these issues?
I think that 2022 will by a decisive year for the Swiss EAM industry. All portfolio managers who started their commercial activity before 1 January 2020 must apply for a licence from FINMA by the end of the year in order to practice portfolio management and most of them are still in the process of obtaining authorisation – only two of our fifty EAM partners have already received the FINMA authorisation! When I speak with our EAM partners, some of them are still assessing whether they will merge with another EAM company, reduce part of their business (for example exit high risk clients or specific high risk countries to facilitate the FINMA authorisation process), sell or even simply terminate their business. 

Because of the bank's commitment and close ties to its EAM partners, Hyposwiss is able to assist in the process and to accompany them in finding sustainable solutions. For example, last year, we oriented a newly-established EAM company towards one of our external partners to help it organise its business, to simplify the licensing process and to act as their liaison with FINMA. With their approval, we also connect existing EAMs with similar business models or when they express an interest in forming partnerships or making acquisitions.

What in your view will the EAM industry look like in five, 10 years’ time and why? 
In my opinion consolidation in the industry will continue and we are going to see fewer players than today. However, I also expect that the EAM industry, as such, will continue to grow in the years ahead. 

Due to the recent regulatory changes, EAMs will need to be better organised. Furthermore, depending on their size, EAMs will need to be more focused on specific strategic areas mainly related to the domicile of their clients.

For these reasons, Hyposwiss strongly believes that the EAM industry will remain an important part of the Swiss financial sector and we will continue to focus on its development.

What are the main tasks that EAMs ask you to help solve? 
Obviously, Hyposwiss offers EAMs and their underlying clients efficient administrative support, acting on their behalf in all banking activities and services, and we do so in a highly personalised manner.

More specifically, we regularly assist with issues relating to US and Canadian clients/prospects that EAMs need to address with the proper local regulators.

We can help and facilitate contact with Hyposwiss Advisors SA, our subsidiary based in Geneva, which offers financial advice and portfolio asset management services to North-American investors in the US and Canada. This solution allows the EAM to maintain a close contact with the clients and earn fees as an Introducer.

Where in Switzerland is the firm located?
Hyposwiss is based in Geneva, with a branch in Zurich and a representative office in Tel Aviv (Israel).