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Yves Mirabaud: head of Mirabaud &Cies growing empire

Date: 24 Jun 2013

Citywealth

Mirabaud & Cie is a traditional private banking name with a history that dates back to the 1800’s. It handles different type of clients, from small clients with accounts in the CHF 500,000 region to those in the tens of millions range. The average size of private client is around CHF 1.5million.
At its creation, the bank was called Paccard. A few years later, Mr Yvan Mirabaud married Mr Paccard’s daughter and joined the bank as a partner. When Mr Paccard died, his name died with him and the bank retained the Mirabaud name. “We only have two partners with family links now,‚Äù says Yves Mirabaud who is the senior partner of the Bank. “We are not a large family.‚Äù Today, the bank has just seven partners in total which will drop to six next year. Yves Mirabaud, who joined the bank in the 1990’s after taking international studies, explains that having non-family partners, one of them being based in London, “brings different competences to the partnership‚Äù. He adds a word of warning for those who may think their partnership is for fat cats. “Partners have to be fully committed to our bank. We need people with a lot of energy to meet the needs of a growing bank and the challenging environment.‚Äù

Family business
According to Mirabaud, his family didn’t put him under any pressure to join the bank but when he tried out the idea he found he liked it. He took over some clients from his uncle and father and rapidly joined the Executive Committee. Mirabaud explains their developments. “Over the last 20 years, we have moved from being a small bank managed by family members to a bigger bank managing CHF 25bn in AUM with a higher quality of staff and robust management rules. In essence, the organisation has changed dramatically. We have different clients and new businesses like Intermediation which we started 20 years ago. Half of our 600 staff are based abroad and we expect there will be more in the future, especially if conditions continue to be difficult in Switzerland.‚Äù

Business lines
Mirabaud & Cie has four lines of business. Private banking, which is its most important area, accounts for 80% of the client base. It also has asset management, which includes institutional asset management and fund management. Thirdly, it offers intermediation activities like brokerage and corporate finance. And finally, it provides a support and back office function. “We have a member of our Executive Committee at the head of each,‚Äù says Mirabaud, “and we also split our overseas offices between the partners. I oversee Dubai and Montreal.‚Äù
AUM are increasingly coming from markets outside of Western Europe, like the Middle East, South America or Eastern Europe. Mirabaud says the bank is not for the time tackling Asia with much gusto although it does have a presence there. “We feel it is very challenging to operate in Asia at the moment,‚Äù says Mirabaud. “People are expensive to hire and client expectations are different. They want us to help them develop their local activities, either through loans or by investing their money domestically. We have to wait for those markets to mature and find the right opportunity to invest in this region, in my view, although we know a lot of Swiss banks are already very active in Asia.’ However, Mirabaud does add, “We have hired Asian investment specialists in London.‚Äù

Talking to Yves Mirabaud
Increasing European presence to counter Swiss economic pressures
“We’ve made improvements in our organisation because we see more challenges to come, like operating in new markets, tax issues or risk management, and we think it is essential to reinforce our staff and have tighter risk controls. We believe this means we need new competences even though this brings more development and retention issues. With increasing Swiss regulation and the lack of market access, we see operating in Europe as becoming more integral to successful growth. We are in Spain, France, Luxembourg and the UK and we are keeping a watching eye to see if we need to expand these offices to develop new parts of our operation.‚Äù

We want to operate in line with international standards
“Swiss banking secrecy is as strong as it has ever been but it will not protect tax evaders anymore. We believe Switzerland has to comply with international standards. However, the problem is when Switzerland decides to apply tighter rules than the global community. Then it becomes unfair competition. There are discussions about asking clients to sign a declaration that they are tax-compliant. We don’t see how we can implement this. If a client can lie to his tax authorities he will do the same to his banker! We are also very much in favour of the protection of the private sphere of our clients. A lot of them come to us because they live in countries which are very inquisitive of private financial affairs and where they live in fear of having themselves investigated by aggressive regimes or being imprisoned in their own countries simply for having money.‚Äù

The modern client, the mordern world
“Today, clients are more entrepreneurial and it is tougher to keep their business. This is the reason we offer intermediation and corporate finance activities. This is also helping us diversify our business from pure wealth management. Clients want more investment ideas so we need more relationship managers and investment specialists. There are many more requests for advice on tax planning which means we have to hire the right specialists. We also feel, as the market gets more competitive, that we need to be more visible. All this is putting a lot of pressure on our institutions and on the margins in the industry.‚Äù

The power of three
“We believe we have three main assets: clients, staff and reputation. The last of these is very important. We don’t want to be in the newspapers for the wrong reasons. When we look at clients who may expose us to reputational issues, we not only look at all compliance issues but also assess the up and downside risks carefully.‚Äù

Vision
“First we need to consolidate what we are doing. Second, we work on opportunities, so if we see something interesting then we will look at it. We are also concerned about the Swiss Financial Centre. Due to protectionism in Europe, we will have to develop more presence abroad and offer services there that we could have offered from Switzerland. Should we not be able to get access to the European market, I am afraid we will lose a lot of jobs in Switzerland.‚Äù

Secret of success for Mirabaud?
“We are serious about what we do. We have a good story. We were maybe felt a little bit boring before the crisis. But we have proven that our model is very strong. Partners have unlimited liability which means full commitment to the bank. It allows us to think in terms of generations and not quarters.‚Äù

The upside of using Switzerland?
“We have good political and economic stability and the strength of the currency. We also have a good quality of services and people.‚Äù

International round-up

Montreal
The office in Montreal, the second-largest City in Canada, may at first sight seem an odd combination to have with Dubai but research shows it is considered a solid destination for financial institutions looking to be near to the USA without being regulated by it. Mirabaud says: “Montreal is now a substantial business for us. It started in the 80’s when European clients were afraid of a possible invasion of Europe by the Soviet Union and wanted to have part of their assets on the other side of the Atlantic. We then later developed the domestic business.‚Äù

Dubai
“We started in Dubai five years ago and it’s become a good place to be connected to the booming countries of India, Russia and the North East African region plus the Arab markets. I go there regularly to support management, see clients and meet new talent. We find clients have lots of businesses which include property development. We also meet with royals and entrepreneurs. The downside is the decision-making process is lengthy. A client will take much more time to make his decision working with us than it would be in Europe for example.‚Äù

Africa and beyond
“We don’t have a physical presence in Africa but we do have staff travelling there and also in Latin America. We won’t deal with cash clients in Africa and generally understanding the reputational risk is a major concern for us. A general rule of thumb is not to work with the top-tier people in government but to work with entrepreneurs and business people. We employ our own judgement and document clients carefully.‚Äù

Is Switzerland seeing as many Russians as London?
“Yes, we see Russians more and more. They are also in Dubai. No one would have guessed in 1985 that Russians with money would be everywhere especially when it was illegal to own a business then. This is a good image of the way our world has change.‚Äù

Where will wealthy French move to?
“My understanding is that the French, if they want to leave France, mainly go to Belgium and UK rather than Switzerland even with our forfeit fiscal arrangement. There are 400,000 French in the UK. Knowing this, I am sometimes surprised by the criticisms that Switzerland is facing on this subject.‚Äù

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