«We have the funds and we have the will to acquire but we need to find the right fit,» Vontobel Asia CEO Alex Fung tells finews.asia in an exclusive interview.

By Shruti Advani, Guest Contributor finews.asia

In the wake of Vontobel’s $705 million acquisition of smaller Swiss rival Notenstein La Roche in May, there is much speculation about whether its franchise in Asia – a region noted for its frenzied M&A activity – is poised for a similar move.

«We have the funds and we have the will to acquire but we need to find the right fit,» is the characteristically direct response from Asia CEO Alex Fung. Genteel as the long-time private banking heavyweight is, he is capable of steely resolve when it comes to steering Vontobel through the region’s tricky waters and he makes no apology for his measured approach.

Experience to Buy

«If we acquire we would have to go onshore and also we need to maintain our unique model, so we would have to find the right match. It is not impossible, but it is difficult,» he asserts, clarifying that Vontobel has not mandated any investment banks in the region.

Which is not to say it will not acquire. Pressed further on which banks may be possible targets, the former Société Générale banker says, «We would be open to all opportunities because in addition to the requisite capital we also have the experience needed to buy a business.»

Double-edged Sword

Regardless of whether or not he does acquire, Fung has his work cut out for him building a platform in the region that does credit to its global standing. «In Asia we are still relatively unknown,» Fung readily agrees before going on to assert that «Team Asia has been profitable for a number of years.»

Which, surprisingly, is a double-edged sword. On the one hand, Fung does not face the pressure from head office many of his peers must grapple with while they are in «investment phase». On the other, he is growing at a slower clip than he would like. The bank is profitable in Asia in part due to a low-cost model of booking wealth assets at the Swiss bank's headquarters in Zurich, saving on costly booking center spending in Asia itself.

Books Do Not Move

«The cost for Team Asia is very efficient but that is because we have not reached the scale we would have liked to.» In the future though, Vontobel may well punch above its weight. «We have a serious appetite to recruit and I do not have a cap on the number of bankers I can take on,» Fung says. He is however, reluctant to announce a headline-making number.

«I actually think it is a pointless exercise for private banks to announce that they are going to hire fifty new bankers or a hundred new bankers,» he says. «Books [assets] do not move with bankers any more,» says Fung who estimates only 30 percent of assets eventually migrate to the new bank when a banker makes the switch from one platform to another.

Not Trading-Driven

Industry sources – headhunters and private bankers – believe the typical Vontobel client in Asia is relationship- rather than transaction-driven and hence relatively «sticky». Its asset size would likely not merit a mention in the region’s league tables, but Vontobel has a «solid and proven» heritage of managing money.

«We are not a household name in Asia,» Fung concedes, but he is clear there are tangible advantages. «We are not a charity but we are also under no pressure to write tickets,» he says alluding to bankers who encourage clients to trade or borrow in order to meet their own quarterly targets.

Advisor Plus Strong Finances

Ironically when Fung talks about why Vontobel may be an interesting proposition for candidates, he could well be listing out the reasons clients choose the bank.

«We offer the best of both worlds. Culturally we advocate the trusted advisor method but because Vontobel is very strong in asset management as well as financial products, we have the ability to offer strong [financial] capabilities. Few banks can offer both.»