With CHF 240 billion out of a total of CHF 609 billion of assets under management and custody at 31 December 2020, wealth management (PWM) continued to be the biggest single component of Geneva-based Pictet Group’s operating divisions, according to its recently published annual review.
But it looks as if Pictet Asset Management (PAM), its fund and institutional asset management will soon match PWM in terms of this particular metric, if not in terms of revenues and profits.
PAM had CHF 223 billion of assets under management at the end of 2020, just CHF 17 billion less than PWM.
Furthermore, PAM grew client assets at a much faster pace than PWM during 2020.
PWM increased its client assets by CHF 6 billion or 2.56 percent on the CHF 234 billion recorded at the end of 2019.
But PAM boosted its clients by CHF 22 billion from the CHF 202 billion recorded a year earlier, a 10.89 percent increase.
Unfortunately, Pictet does not segregate its financial results by operating decision so it is not possible to establish whether or not PWM has hegemony within the group in terms of income and profits as well as AUM.
It looks only a matter of time before the baton passes to PAM, however, in terms of all three metrics as it has grown constantly faster than PWM since its establishment as a discrete entity in 1980.
Nonetheless, PWM continues to expand under the joint supervision of managing partners Remy Best and Boris Collardi.
Indeed, PWM boosted the number of client-facing employees faster in both absolute terms than PAM.
Full-time client facing equivalents increased by 69 from 1,029 to 1,098 at PWM. PAM increased its client-facing personnel from 1,003 to 1,035.
Given the potential for greater scalability at PAM, however, the likelihood is that its workforce generates a much higher revenue yield than those at PWM.
Asia continues to provide the main source of potential growth for both PWM and PAM.
At PWM the imperative of an increased presence may have underpinned the decision to recruit Mr Collardi from Julius Baer in November 2017.
As chief executive at the Zurich-based private banking specialist from 2009 he had overseen considerable expansion, not least in Asia, a region he knew well as a consequence of being based in Singapore for around 5-years while with Credit Suisse.
China provides an obvious growth magnet for both PWM and PAM.
But according to its 2019 annual review, PWM will service this market from its existing offices in Hong Kong and Singapore rather than establishing a mainland presence. PAM has already opened an office in Shanghai to serve qualified investors in China.
PWM and PAM are both much bigger in terms of assets under management and custody than Pictet Alternative Advisors (PAA) and Pictet Asset Services (PAS), the other two operating divisions.
PAA, which manages and advises on alternative asset portfolios for private and institutional clients of PWM and PAM, had CHF 29 billion under management at the end of 2020, a CHF 1 billion increase on the CHF 28 billion managed at the end of the previous year.
PAS, which provides custody and asset servicing facilities had CHF 193 billion of assets under custody at 31 December 2020, a CHF 7 billion or 3.76 percent increase on the CHF 186 billion recorded at the end of the previous year.
Pictet reported total income and operating profits of CHF 2.89 billion and CHF 693.72 million respectively.
Income increased by 14.46 percent from 2019’s CHF 2.63 billion. Operating profit increased by 9.05 percent from CHF 606.09 million.
