The great Swiss re-allocation?

A brief look at the Swiss finance industry.

The Credit Suisse shock and the actual takeover by UBS happened a good while ago now.

The collapse of CS and the resulting integration into UBS is reshuffling the cards for investment firms, (private) banks, asset managers and, above all, investors. Over the last couple of weeks I spoke to several different players in the Swiss market. From sales managers, to portfolio and fund managers, as well as chairmen.

Guidelines and requirements designed to prevent concentration risks are likely to prohibit numerous existing CS clients from simply integrating their assets into UBS, especially if UBS already manages other assets of the respective investors. This is because all risks are bundled with one and the same manager. UBS. Any risk manager's hair would stand on end.

The market is now becoming interesting in three areas.

I. Investors

More conservative investors such as pension funds are not known for being able to make quick decisions and transfer billions back and forth between different institutions within a very short space of time. Although the welfare of employees and depositors is paramount here, risk diversification and thus reallocation should be in the interest of pension funds. At the same time, however, reallocation means new due diligence, new investment products, new contacts and more work. This is a time-consuming and nerve-wracking process given the sums of money involved. Pain!

II. Sales

How are the sales teams dealing with the new situation? Aggressive approaches might scare the investors. Too conservative approaches might simply push them to the top five to top ten firms who already dominate most parts of the market. On the sales front, it is now important to take strategically clever steps to attract funds without scaring off investors. At the same time, it should be borne in mind that the Swiss market is relatively small. Everyone knows everyone here. You will inevitably step on the toes of one or two of your companions. Will more attractive remuneration models, reduced fees, or other cost blocks be reduced in order to incentivize a switch of funds to new managers? We shall see!

III. Legal

Risk managers, legal and compliance are faced with enormous audit volumes. For upcoming reallocations, we talk about due diligence, ESG compatibility, the analysis of cluster risks, concentration risks, conflicts of interest, investment products, investment philosophies, investment horizons and much more. All against the backdrop of billions of CHF. The CS scenario could also be used as an opportunity to review the other partners, because if Pandora's box is already open, why not directly venture a strategic analysis with potential broadly diversified asset reallocations.

My personal outlook

I think it will be exciting to see whether there will actually be a distribution battle. Anyone who follows the Swiss financial press will know that new asset managers and small private banks and boutiques are springing up, while some long-established names are struggling to survive. The quake caused by CS, which is far from being fully processed, makes for an interesting playing field. Billions are at stake here. Traditional sales strategies vs. modern marketing measures. Traditional and mixed strategies vs. AI and crypto investments. Big banks versus asset managers and specialized micro-boutiques.

A race for new market shares has begun. With this in mind: Gentlemen, start your engines!

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