Boris Collardi and the puzzle of Swiss private banking

New horizons: Boris Collardi has announced his move from Julius Baer to Pictet © KEYSTONE / WALTER BIERI

Boris Collardi, the outgoing chief of Julius Baer, once told the Financial Times that he worked 14-hour days and was on the road for 300 days a year, before adding enigmatically: “Never believe what a banker tells you.”

The 43-year-old’s decision to quit the top job at Julius Baer to become one of seven partners at Swiss rival Pictet is just as puzzling — and has ramifications far beyond the boardrooms of Switzerland’s middle-tier private banks.

For Pictet, snagging Mr Collardi, looks like a great coup. In eight years at the helm of Julius Baer, he has driven a 50% increase in the bank’s share price with a strategy of relentless expansion. Pictet’s interest in him is evidence perhaps that the privately owned group is weighing a change of direction: away from so much asset management, into Asia and the Middle East more aggressively, or just generally into faster-growth mode.

For Julius Baer, the CEO’s departure looks an obvious negative. The shares tumbled 6% and by appointing the chief risk officer as a stand-in, the board has appeared ill prepared.

For Collardi himself, the big question is: why?

Some of the motivation may be personal. He may, for example, like the idea of no longer running a complicated listed company, given the long hours and hassle involved. Mr Collardi, whose divorce was revealed early this year, may also welcome an income boost. Swapping a high-pressure job in Zurich for a far more lucrative position based near his family in Geneva is entirely logical, says a friend.

For someone who earned CHF6.5 million ($6.6 million) as CEO of Julius Baer last year, it is easy to underestimate the draw of greater riches. According to people close to the situation, Mr Collardi could in time be in line for annual income of at least CHF25 million as he shares in the partnership spoils of Pictet’s profits (more than CHF422 million last year).

The Julius Baer board may feel there is cause for gratitude, too, given the bank’s performance in recent years. Mr Collardi has apparently told friends he is expecting a “considerable” pay-off — absurd as that may sound given that he is leaving for an arch rival.

Either way, Mr Collardi’s interest in lowering his profile and amplifying his wealth marks a clear change of heart, given previous ambitions to wield greater power and influence.

Only three years ago, as Credit Suisse wrestled with its future identity, Mr Collardi was being considered as the potential chief executive of a merged CS-Julius Baer, on the assumption that the group would refocus on wealth management and private banking, and hive off its US-anchored investment bank.

That of course is similar to the strategy advocated by RBR, the activist hedge fund that recently acquired a small stake in Credit Suisse, arguing for a three-way division of the group.

RBR on Monday denied a press report that it had sold down its investment amid suggestions from bankers that the stake was now below 0.2%. As reported in this column last week, RBR had hoped that other investors, such as Saudi Crown Holdings, would join its campaign. That may yet happen, though the Saudi wealth fund is unlikely to act until next year for fear of making a major move that would displease the crown prince.

For now, there is little sign that RBR’s campaign is gathering momentum. Its recent meeting with Credit Suisse chief executive Tidjane Thiam seemed to focus principally on ramping up cost cuts, rather than wholesale strategic change.

Mr Collardi’s move into the shadows merely buttresses Credit Suisse and Mr Thiam further.

First, it takes out of the equation a CS alumnus who had been widely seen not only as a potential chief executive but also as a break-up agent.

Second, and more practically, it takes the wind out of one of CS’s biggest local competitors. Under Mr Collardi’s leadership, Julius Baer had been poaching some of CS’s best wealth managers for years. That pattern is likely to slow, though whether Pictet picks up where Julius Baer leaves off is an open question.

It is hard to see Mr Collardi — however mysterious his ways — vanishing from view.

© 2017 The Financial Times Ltd. Originally published at FT.comExternal link