Falcon aims for $20 billion in assets on emerging market push

Zurich based bank focusing on expansion in the Middle East and Asia
Falcon aims for $20 billion in assets on emerging market push
DOUBLE ASSETS: Falcon Private Bank expects to double assets under management to $20bn in two to three years by tapping into emerging markets. (Getty Images)
By Bloomberg
Wed 13 Oct 2010 04:55 AM

Falcon Private Bank, a former unit of American International Group, said it expects to almost double assets under management to $20 billion in two to three years by tapping growing wealth in emerging markets.

The Zurich based bank, which today manages about $12 billion, aims to reach the level by focusing on expansion in the Middle East and Asia, Eduardo Leemann, chief executive officer, said in an interview in Dubai yesterday.

Leemann said: “Everything we’re focused on is east of Switzerland as these is where the growth markets are - Asia, Russia and the Middle East. They’re the big contributors. We’ve forgotten everywhere else.”

Private banks are aiming to boost their businesses in emerging markets where economic expansion is driving prosperity. China’s household wealth is set to more than double to $35 trillion by 2015 should the country maintain its growth rates, Credit Suisse Group said in its global wealth report released Oct 8. India’s wealth may also rise 83 percent to $6.4 trillion over the next five years, the report said.

Falcon, which was bought by the Abu Dhabi fund Aabar Investments in December 2008, will focus on developing its private banking business rather than its institutional division, Leemann said.

“The institutional business didn’t really work, so we decided to shrink it to a few core competencies, all of them in the alternative asset management space,” said Leemann, who was also the CEO of AIG Private Bank.

He added: “It’s a privilege in this changing world to basically start a business from scratch without any legacy issues and the big trend will be advisory driven private banking.”

Aabar, the biggest shareholder in luxury carmaker Daimler, paid 307 million Swiss francs ($273 million) and assumed $104.45 million in debt to take over the bank from AIG after the insurance giant was forced to sell assets including life and retirement services and a plane lessor to repay a US government loan that saved it from bankruptcy.

Falcon expects to have $8 billion of private banking assets under management within the next two years, compared with $5.1 billion today, the CEO said. The bank held $3.6 billion in private banking assets at the end of 2009.

Falcon currently has $400 million of private banking assets under management in the Middle East where Aabar is based, and expects to more than double this to $1 billion in six months, according to Leemann.

He said: “This is a very attractive market for us. It’s one of the world’s biggest in terms of private banking.”

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