Liechtenstein-based bank LGT has bought a German roboadvisor very soon after its return to the German market, a significant move.
LGT which has been owned for more than 90 years by Liechtenstein’s royal family is putting its faith in a fintech which has only been around for about five years. The bank has agreed to acquire a strategic minority stake in the Germany-based digital wealth manager LIQID, it said in a press release Thursday.
LGT did not reveal either the price or the size of the stake. The transaction is subject to regulatory approval.
Success Story
However, LGT did reveal its ambition to develop LIQID into Europe’s leading provider of digital private banking.
The Berlin-based startup specializes it giving private investors with a minimum of 100,000 euros ($118,000) to invest access to alternative investments such as private equity, venture capital and real estate, which are usually only open to professional institutional investors.
LIQID is one of the few success stories among German robo advisors. It currently manages over 1.4 billion euros for its clients. LGT, Toscafund Asset Management, HQ Trust, Project A und Dieter von Holtzbrinck Ventures have all invested in it.
Access to Mass Affluent?
With over 240.7 billion Swiss francs ($262.5 billion) of assets under management and over 3,800 employees worldwide LGT is several times larger than LIQID.
LGT has a solid position in both traditional private banking and asset management. However, the question for the princely bank is whether it will be able to hold on to its rich and super-rich clients as they increasingly go digital.
LIQID offers a solution as well as access to mass affluent clients because of its business model. J.P. Morgan recently made a similar move when it bought U.K. robo advisor Nutmeg.
«We are delighted to be supporting LIQID in its ongoing expansion and also expect this to provide impetus for the further digitalization of our own services. The collaboration with LIQID will enable a broader segment of private investors in Germany to access LGT’s investment expertise,» LGT Chairman Prince Max of Liechtenstein said in the press release.
Back in Germany
The stake in LIQID comes against the backdrop of LGT’s return to Germany, the largest private banking market in Europe after having pulled out over a tax dispute. Its German business will be led by Roland Schubert, currently head of LGT Bank in Liechtenstein.
