The Formula E race circuit is coming to Zurich – the first motor race allowed in Switzerland in 64 years. finews.asia looks at how banks including Julius Baer and LGT are seeking to benefit from the landmark event.
June 10 will see the first motor car circuit race in Switzerland since 1954. It was then that the country issued a ban following the horrendous crash in Le Mans which killed 80 spectators and one driver.
In nine days, Formula E teams including one captained by Sebastien Buemi, a 29-year-old Swiss-born former Formula 1 pilot, will make their way through a 2.46-kilometer race track on Zurich's crowded lakeside area and the leafy neighborhoods which are home to countless finance boutiques.
(Image: Swiss E-Prix Operations)
Two banks are at the forefront of the event: Julius Baer hopes to bolster its image by pouring a double-digit sum into being the global sponsor for Formula E, as finews.com has written previously. By contrast, Liechtenstein-based LGT is sponsoring the Audi Sport ABT Schaeffler team helmed by German pilot Daniel Abt.
Tickets Sold Out
For both firms, the event is a chance to splash their names across prime advertising space for a global sporting audience as well as an avid local one – tickets for the event in Zurich sold out in a matter of minutes.
For finance firms, with few of the physical products which evoke an emotional response from clients, sponsoring represents a rare opportunity to present their brand in a favorable light. It's also a chance to shmooze clients with behind-the-scenes access and posh VIP treatment.
Home Turf
Formula E, led by Spanish businessman Alejandro Agag, is free of the taint of corruption that accompanies Formula 1, and is positioning itself as the more environmentally-friendly alternative to Formula 1's gas-guzzling combustion engines.
Locally, Julius Baer has the most riding on the racing event: Switzerland represents home turf, of course, but has actually long been neglected in favor of hot growth markets such as Asia and Latin America.
Frustrated With Perception
But Julius Baer has become frustrated with the perception stemming from its flirt with Asia's ultra-rich that it would sniff at clients with a mere million or so. CEO Bernhard Hodler has privately griped that members at his tennis club view Julius Baer as a private bank with a 5 million franc ($5 million) minimum to get in the door.
In fact, Julius Baer's influential private bankers have the authority to accept affluent clients with a mere 500,000 francs, providing they can make a case for wealth growth down the road. The Formula E event is part of a carefully-crafted strategy to vault Julius Baer up the ranks in the notoriously fragmented and fiercely competitive Swiss market.
Prominent Bankers Lost
Market data is closely guarded, but Julius Baer is believed to hold a market share in the single digits – an unusually low measure for the country's third-largest private bank. The company initially pursued an acquisition of Notenstein La Roche, but later dropped its pursuit. The Raiffeisen-owned bank was sold to Vontobel, a Swiss rival, two weeks ago.
Julius Baer has also lost prominent private bankers to rivals, and is expected to suffer another wave of departures as ex-CEO Boris Collardi settles in as a partner at Pictet in Geneva, its nearest rival by size.
Hospitality and Philosophy
The Formula E race is timely and the Julius Baer bankers are falling over themselves to attract new business both with existing and potential clients. As a global partner of the series, the bank has its own hospitality area at a central location along the track, right above the pit lane. This is where it will invite its clients on race day, a company spokeswoman told finews.asia.
Also, the bank will host a series of client events in Zurich, Geneva, Lugano and Bern before and after the race, focusing on topics such as future mobility and next generation investment philosophy.
Emotion Club for the Chosen Few
LGT has invested equally in a program for current and future clients at and around the event in Zurich. LGT relationship managers are able to buy tickets for the exclusive and exclusively priced Emotion Club. They have to use their own budgets and hence will invite only the chosen few, a spokesperson told finews.asia.
The bank also hired lakeside restaurant Quai 61, where it will provide its clientele with food and drinks as well as screens to watch the race. LGT also reserved 180 grand stand seats for clients and acts as a sponsor of eDays.
No Overseas Guests
In keeping with the progressive touch that the event organizer is keen on, both banks are making sure that their activities won't have a lasting negative impact on the environment. Julius Baer's hospitality lounge is a wooden construction that can be recycled and it uses e-cars to transport the guests to and from the event.
Maybe the most helpful component of this effort is the two banks' commitment not to fly in guests from overseas to watch the race in Zurich. Which would also defy the purpose given that the race has other events in financial market hotspots such as Hong Kong and New York.
