Independent move
international private banking trust
4 What'sNewS Issue 1 January 1999
For some years, International Private Banking (IPB) Trust has been one of the
mainstays of Rabobank International s aim to provide a full range of integrated
services to customers. In June last year, it was announced that IPB Trust would
be presenting plans to set up as a separate, though obviously still related,
entity. Those plans have now been finalized. IPB Trust has strengthened ties
with Robeco's international private dient business, a combined operation to be
launched this quarter. We find out why we are making this independent move,
what advantages it brings and just how ambitious its 1999-2003 targets are.
Fast growth
Advantages and synergies
Room to move
Doubling assets
Changing markets
Robeco advice
IPB rose to prominence in Rabobank
International (RI) back in 1995. At that
time, the newly appointed head of private
banking Thomas
van Rijckevorsel
(right) had been
working closely
with consultant
Heinz Zimmer on
an ambitious
expansion plan.
Their task was to
breath new life into what could then only
be described as a low key operation.
Major growth would be organic and
achieved through selective acquisition of
private banking operations. This would
boost the level of assets under
management (AuM), making IPB a serious
factor in RPs ongoing expansion.
The international private bankers were as
good as their word - the ambitious targets
set by the 1995 business plan were not
only achieved. They were actually
achieved well ahead of time, not least
through the good offices of former
consultant, now IPB's Swiss chief Heinz
Zimmer and new recruits around the
network. In November 1997, as the rest
of the organization was coming to grips
with the arrival of product specialists and
a shift to a matrix, rather than national or
regional organization structures, Van
Rijckevorsel's announcement that 1999
targets had already been surpassed seemed
to pass most Rabobankers by. However,
that is exactly what IPB had done. Within
two years, a substantial team had been
established in Southeast Asia, the Swiss
operation had also been expanded and
globally IPB had more than doubled
AuM, achieving an average AuM return
of 1 percent.
While this growth was ongoing and new
targets were being established for the
future, the Rabobank Group had
successfully negotiated the acquisition of
Robeco, the Rotterdam-based asset
manager and recognized top player in
asset management through direct
marketing. There were discussions on
how both financial institutions could join
forces and get the best advantage from
economies of scale and synergies. Being a
financial institution with cooperative
roots, the discussions took time, hut have
since been finalized. From 1999, IPB
Trust and the relevant parts of Robeco's
international operations will come
together in the new Private Banking
Trust Division.
So much for the background. You could
be forgiven for wondering why this
successful and lucrative arm of R1 is
setting up on its own, rather than staying
within the
fold. 'The
reality is that
our F&A and
health care
focuses means
we haven't
always given IPB the attention and
investment it deserves,' comments RI's
acting chairman Rik van Slingelandt.
Hanno Riedlin (above), who has
responsibility for IPB within the managing
board, agrees. 'IPB needs rather more
room to manoeuvre and grow than it has
at present,' he says. 'We believe the
common sense thing to do is to give our
people the freedom they need to further
develop and pursue their growth strategy.
That means a synergy with various parts
of Robeco. However, the fact that the
Private Banking Trust Division will
become a separate entity does not imply
we are no longer related. We're still part
of the same family.'
Pursuing growth strategy means the
newly created division will start from a
perspective of economies of scale and
synergized action to doublé current assets
under management of over NLG 18
billion (EUR 8.1 billion). At the same
time, this is by no means a simple merger
of Robeco with IPB Trust. The
synergies agreed by both Rabobank
Nederlands executive board and Robeco's
policy committee involve IPB, Robeco's
international operations in Luxembourg
and Switzerland, and Robeco's Marketing
Private Banking team in the Netherlands
coming together to create the new
division, whose name has yet to be
officially decided. At the same time,
current Trust activities by our offices
world-wide will be gradually expanded.
'What we're doing,' explains Thomas van
Rijckevorsel, 'is joining together
operations where it makes sense, not
forcing synergies. For now, Schretlen,
Banque Robeco in France and Robeco
Belgium will not be part of the merger.'
Where does that leave us? 'In practical 4
terms,' he continues, 'we merge our IPB
with Robeco's Luxembourg and Swiss
operations. We believe this is sensible
because it allows us to combine two very
different marketing techniques -
relationship and direct to create
opportunities for cross selling and new
business.' The thinking hehind this move,
which would bring Robeco's direct
marketing skills and expertise as well as a
new customer base into the big picture for
the division, is a recognition of how
financial markets are changing. 'It will
allow us to offer our cliënt base the best
of both worlds, while building on our
own areas of expertise - international
private banking and the creation and
management of funds, which is what
Robeco does so well.'
People in the combined operations are
already proving eager to focus 011 the
future, rather than dwelling on the past.
