Falcon on track for $1bn in assets by year-end

Aabar Investment-owned bank saw $541m in net new money in first two months of the year
Falcon on track for $1bn in assets by year-end
Falcon expects to have $1bn in private banking assets under management by the close of 2011
By Gavin Davids
Tue 08 Mar 2011 04:09 PM

Falcon Private Bank, owned by Abu Dhabi’s Aabar Investments,
saw inflows of $541m in net new money in the first two months of the year, the
CEO of the Zurich-based bank said.   

The bank, which has scaled back its institutional services
in favour of a focus on private wealth, said it generated $1.83bn in net new
funds globally in 2010, Eduardo Leemann said.

“We had a very successful 2010 because our total new money
went from $12.2bn to $12.75bn till the end of 2010,” he told Arabian Business.

More than $540m was generated from the UAE, he said.

Falcon, which was bought by Aabar in December 2008, said in
November it planned to almost double its assets under management to $20bn
within three years by tapping growing wealth in emerging markets.

The bank lost nearly $1bn after shrinking its institutional
assets to a few core units, a loss that was offset by a gain of $1.83bn in
private banking assets under management.

“It wasn’t in our strategy to lose a billion in assets,
obviously, but it just happened that way,” Leemann said. “There are certain
things we just don’t do anymore. We’ve closed a few funds, hedge funds and so
forth. With the new strategy focusing on private banking, we lost a few pension
fund mandates, particularly in Switzerland and Germany,” he said.

Private banks have pushed to grow their businesses in
emerging markets where economic expansion is driving household wealth.

Amid rising oil prices, which reached a two and a half year
high earlier this week, the Middle East is an increasingly lucrative market for
private banking, said Leemann.

“We manage $432.6m [in the Middle East], and
that has developed over the last nine months. We have a clear target to go to a
billion dollars by the end of 2011. [In] the last nine months, we went from
zero to over $400m,” he said.

“I think the Middle East is an emerging market in terms of
wealth management services. It’s obvious that the wealth market in Europe is
not growing at the same pace as the markets in Asia. That’s where the wealth
creation is.”

Abu Dhabi-owned Aabar paid around $273m and assumed $104.45m
in debt to buy Falcon from American insurance giant AIG in 2008.

Falcon plans to fuel its growth by expanding into key Gulf
states and then Indonesia, China and Russia.

“We’re looking at Saudi Arabia as an attractive market,
Qatar and Kuwait are attractive to us,” he said. “Our plans for 2011 are to get
Abu Dhabi up and running, focus very much on the Middle East and get to our
billion dollar target.

“Target number two is to expand in Russia, double our books
[there]. Our third target is out of Hong Kong, focus on the Chinese market. If
we get these things right, we’ll have a very successful year,” he said.

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