The full legal merger of Kleinwort Benson and SGPB Hambros will provide clients with a range of award-winning products from both entities. However, there’s still lots of work to be done to finalise our future product offering before it can be rolled out to clients. We have asked Mouhammed Choukeir, Kleinwort Hambros Chief Investment Officer, to tell us what is still on the ‘to-do’ list.
HOW IS THE COMBINED PRODUCTS WORK STREAM GOING?
Since the acquisition last year, teams from SGPB Hambros and Kleinwort Benson have been working hard to identify how we can pull together the products from both companies to provide a strong proposition for clients of Kleinwort Hambros.
We have an exciting array of award-winning products as a starting point. The combined firm will bring together a robust investment process with a suite of traditional and alternative investment products. In addition, the product suite will also include banking, credit products, private merchant banking, trust and private investment office services.
ARE YOU PLEASED WITH THE PROGRESS THAT HAS BEEN MADE SO FAR?
We are very pleased that we have been able to identify a range of products which will set us apart in the marketplace and give us a strong competitive advantage. We will be able to combine the best products from both companies which will help our bankers and investment advisers offer a broad range of services to clients.
We have to accept that the wealth management market in the UK and in the Channel Islands is a difficult one – with challenging market conditions. However, the fact that we are working towards combining our businesses to achieve economies of scale and to provide a compelling product range, puts Kleinwort Hambros in a great position to continue to deliver a highly personal service to its clients.
WHAT WILL THE KLEINWORT HAMBROS INVESTMENT PROCESS LOOK LIKE?
The key objective is to have a single house view rooted in a robust and repeatable investment process. To that end, the Kleinwort Hambros investment teams are working closely with other Societe Generale Private banking entities as well as Lyxor Asset Management1 to ensure all the investment intellectual capital is harnessed to form that house view. The investment philosophy of both firms is to focus on fundamentals, such as valuations and to ignore all the noise that comes with investing in financial markets. The investment DNA of the two banks can be described as a “star process, not a star manager” culture. We are passionate on ensuring our investment decision making is not only robust, but also consistent and strives to deliver performance for different client objectives.
WILL THERE BE ANY OTHER BENEFITS FOR KLEINWORT HAMBROS CLIENTS?
Going forward, the new product range also includes hedge funds and private equity which haven’t, to-date, been meaningfully available for clients of Kleinwort Benson. Clients will also benefit from full private banking services for the first time and will be able to have bank accounts and debit cards. We will also be able to offer wider lending solutions. This goes beyond Lombard Lending, which is a loan granted by the Bank and secured by client securities, for example, to providing specialist lending solutions for luxury items such as yachts and jets.
WILL KLEINWORT BENSON’S PRIVATE MERCHANT BANKING TEAM CONTINUE TO OFFER ITS SERVICES?
Yes, the mid-market private merchant banking specialist team will continue to focus on merger and acquisition transactions, capital investment and principal investment in the mid-market in the UK and Europe, working on deals up to £500m. This will be a new service for SGPB Hambros clients and this will continue to be an important feature as it complements the banking and investment services offered by Kleinwort Hambros. We are confident this will provide additional value for our entrepreneur clients who wish to seek investment advice or wish to invest.
WHEN WILL PRIVATE BANKERS FROM BOTH COMPANIES BE IN A POSITION TO OFFER KLEINWORT HAMBROS’ NEW PRODUCTS AND SERVICES?
The full legal merger of the banks in the UK and Channel Islands will take place during the course of this year. Until then, we will continue to operate as separate legal entities, with each company continuing to work with its own clients.
However, if private bankers from either Kleinwort Benson or SGPB Hambros feel that a particular client would benefit from a product or service offered by the other company, then they are able to introduce them to the other entity.
We may be becoming a new private bank but our fundamental philosophy of putting our clients at the core of what we do will not change. We have purposefully shaped Kleinwort Hambros to offer a wider range of wealth management and banking services to private individuals, families and charities. We will aim to differentiate ourselves through our ability to advise on personal and corporate aspects of our client’s affairs in a cohesive manner and via this new combined offer.
1 Lyxor is fully-owned subsidiary of Societe Generale Group, was founded in 1998 with the aim of delivering sustainable performance solutions anchored on research and risk management and offering enhanced transparency, liquidity and flexibility.