Lombard Odier has withstood no less than 40 financial crises in its 225 years, senior partner Patrick Odier tells finews.asia in an exclusive interview. The pandemic's first year proved difficult but lucrative, he says.
Patrick Odier, how was your business in Asia, where Covid-19 spread far earlier than in Europe?
It was a good year for us in Asia as well which confirmed the favorable development of 2018 and 2019. We're set up a little differently in Asia: we work out of Singapore and Hong Kong, especially with discretionary mandates, meaning we don't offer trading or execution-only business.
We also cooperate closely with local banks in seven countries, which gives us access to clients we can offer specialized investment solutions to.
«We want to expand our cooperation in Asia»
Asian clients increasingly want their money managed in their own region, «onshore». We can meet this growing need with our partnerships with co-labeling.
How will you expand in Asia?
We want to keep expanding the style of cooperation we have with selected banks. With Kasikornbank in Thailand, we'll offer additional alternative investments, and in Japan with Mizuho Bank we'll keep expanding in Singapore.
Is this the last set of financial results you will preside over as senior managing partner of Lombard Odier?
Why do you say that?
You are due to hand over to Hubert Keller next year.
That's right – at the end of 2022. In the months leading up to then, I'll gradually hand over my mandate to Hubert Keller. So in that respect, I'm afraid you'll have to put up with me next year as well.
How would you describe last year personally, in three words?
For our clients and for the bank a very good year with strong investment performance, which underscored our business model.
«2020 supported us in several aspects»
Our profits rose nearly 20 percent and we have a high inflow of new money – 12 billion Swiss francs net – roughly in equal parts from private and institutional clients. This led our client assets to 316 billion francs, which is six percent more than in 2019.
Last year didn't begin very favorably. How worried were you then about the bank's performance through the year?
Our role is to take care of our clients and their assets every day. That's our contribution and our added value. This was born out in 2020 in several aspects.
Explain how.
Our clients placed a lot of trust in our market views last year and in our advice. That's why they didn't panic and exit in March and April, and stayed invested instead. There was also increased sensitivity to sustainable investments which strengthened massively in 2020 and even rewarded our clients with higher returns.
«Forty financial crises in 225 years of existence»
That's exactly what convinced us that our business model is the right one. We're proud to tell people that Lombard Odier has withstood no less than 40 financial crises in its 225 years of existence.
Do these expansion plans for 2021 mean a much higher headcount?
Yes, especially in Switzerland. We hired 60 people last year, net. This year we'll hire roughly the same amount of talent to keep growing.
In view of the major structural changes in finance, the typical profile for a private banker is also evolving. What type of banker are you looking for?
We want personalities who are good listeners, can think entrepreneurially and can understand a client and their needs comprehensively. That's not always easy, since we're often dealing with business owners and families whose financial situations are hugely vast and complex.
«The profile of a private banker is changing dramatically»
This requires a more holistic view. We're also looking for bankers with extensive expertise in new asset classes like private equity or cryptocurrencies and a good sense of risk management.
Pension solutions for executives and for entrepreneurs are a big issue today, where it's about optimizing an investment portfolio and tailoring its tax aspects. So there is a huge shift in terms of the job description for private bankers, which makes it more difficult for us to find the right people.
Your technology platform is a key revenue contributor and central element of your business model. Did Lombard Odier win additional banks last year?
After onboarding Bank Syz in 2019, we decided to consolidate our platform and optimize it by integrating new technologies. We wanted to redefine the client experience and will invest heavily in the coming years in our technology.
«An asset management acquisition? I wouldn't go that far»
As a result, we didn't take in any more banks in 2020. We're already in negotiations with several potential new clients, which should distill in the course of this year.
The asset management industry is undergoing major consolidation. What is your investment management business's role in this?
Our top priority is organic growth – that won't change. But we're looking around in case of opportunities.
Is the acquisition of a competitor an option for you?
I wouldn't go that far. We're increasingly interested in teams who are specialized in themes and investment expertise that complement ours. So the answer to your question is yes, we're interested in competitors, but specifically in exceptionally good teams.
What is the split of net new money in your three businesses?
The net new money was across our private client business as well as asset management, which had strong inflows last year.
Your three most important priorities this year?
Our first one is proximity to clients in order to chaperone them through uncertain times by protecting their assets and showing them opportunities that emerge from current developments.
«Speaking from business owner to entrepreneur»
Second, we want to strengthen and hone our expertise in sustainable investing because it is shown to provide clients with added value. I think sustainable investments will be the biggest driver of returns in the foreseeable future.
Then we're paying attention to the risk of our entire group in order to manage it as well as we have done the last 225 years and to contribute to the operational strength of our group. The solidity of our business was enormously reassuring for our clientele, especially in the most recent crisis.
I also have to credit our owner-led organization with partners invested with their own assets. We're speaking as business owners ourselves to clients who are also entrepreneurs. And last but not least, we're focusing exclusively on wealth and asset management and investment opportunities tied to these businesses. That helps us have a clear focus.
(Lombard Odier partners, from left, Denis Pittet, Patrick Odier, Hubert Keller, Frédéric Rochat, Annika Falkengren, and Alexandre Zeller)
Patrick Odier is the senior partner of Lombard Odier, co-founded by his family in 1796. He joined the Swiss private bank in 1982 and spent seven years as chairman of the Swiss Bankers Association. Odier studied economics in Geneva and earned an MBA at the University of Chicago. He is also part of the oversight of business lobby Economiesuisse as well as involved in several foundations and non-profit organizations. He hands over as senior managing partner to Hubert Keller at the end of next year, in a succession plan disclosed two years ago.
