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Ultra-wealthy and family office focus of SGPB backed Kleinwort Hambros

By James Beech

Rebranded wealth manager Kleinwort Hambros says it has the expertise to grow in the Brexit ultra-high net worth and family office market, with the backing of Societe Generale Private Banking (SGPB).

The ongoing merger of the 230-year-old private bank Kleinwort Benson with the 177-year-Hambros, the wealth management arm of Societe Generale Private Banking in the United Kingdom, Channel Islands, and Gibraltar marked its latest milestone this week with the unveiling of its consolidated name and logo.

Kleinwort Hambros is on course to become a leading British wealth manager, with combined assets under management of £16 billion ($19.9 billion), by the time the complex merging process is expected to be completed in the first half of 2017.

Speaking at the press launch in London this week, Eric Barnett (above left), chief executive, said Kleinwort Hambros will be looking to expand the family office component of its business “significantly” throughout Europe.

“When the opportunity came along to buy Kleinwort Benson (KB) this year, it was exactly in line with what we always wanted to do with the name we felt most comfortable with, which was a very happy coincidence, but in the context of the strong belief the UK will remain an important economy and the UK will remain an important centre for high net worth wealth.”

Barnett said both historic institutions enhanced the other's product range.

“KB has, for example, a small mergers and acquisitions (M&A) team which we don't have in Hambros, which I think fits very nicely in the private client arena.

“Hambros obviously, being part of Societe Generale Group, has a much larger product range including services like yacht finance to more mundane things such as day-to-day onshore banking, which KB doesn't currently do. We will end up as a full-service bank for the large businesses which will cover everything, from cheque books at the sublime end to yachts at the other end.”

Family offices were an area where strengths were complimentary, Barnett said.

“KB, for example, are able to offer aggregated reporting, which we weren't in Hambros. Although we have talked about it and looked about it, KB were further on from us so that's a great opportunity for Hambros clients.

“We in Hambros have a key client segment (KCS) where we have a wider product range and a difference process to deliver, which KB don't currently have but will have now, so there is something for both to come out of it.”

Barnett said most of the family office activity would be based in the KCS, which serves clients with £25 million or more of investable assets retained with the bank.

Barnett said the impact of Brexit on the economy will be felt as much by Kleinwort Hambros as any other UK business. However, its “strong big brother” SG Group gave the new entity a broader perspective.

“Within Hambros we have the other booking centres outside of the UK and SG obviously has abroad booking centres beyond that in Switzerland, Luxembourg, Monaco etc,” Barnett said.

“It's a strong statement from SG to have completed on the deal before the outcome of the referendum was known. The referendum, as a fact, was known and they were very well aware the vote could go either way and nonetheless felt sufficiently confident in the future of the UK.”

Jean-Francois Mazaud (above right), head of SGPB, said the “risk aversion evolution” among clients over the months to come was the key Brexit question.

“The UK is not that significantly different from other key markets in the world, the only additional point being the negotiation of the Brexit.

As we all know, it is not a short-term, immediate perspective so, in the meantime, our clients do need advice and they want to engage in certain decision making with respect to the management of their wealth.”

Mazaud said ultra-wealthy clients were being more cautious regarding equity and capital markets.

“Over the last year, with the volatility of the market, we have seen our clients diversify their wealth into alternative investments and we have equipped ourselves to meet these needs.”

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