25 January 2011
Globalance, the sustainable investment private bank set up by responsible investment pioneer Reto Ringger, has received its banking license from Swiss banking authority FINMA and has named its board of directors.
The bank is pursuing what it says is a novel business model focusing on sustainable investments and transparency and is aimed at rich individuals, family offices and foundations.
In an interview with Environmental Finance, Ringger disclosed more details about how the bank will operate. It will only offer third-party investment products, rather than proprietary ones, to ensure that only the best performing and most appropriate products are offered. The bank has built up a database of 1,400 responsible investment products it can recommend to clients, Ringger said.
Globalance will also pass on any third party commissions – which can account for almost a third of the commission paid, Ringger said – back to the client.
Ringger said that, while “not a low-cost supplier”, Globalance is able to keep costs down despite eschewing commission income by outsourcing many of its functions. “We’re starting the bank on a green field – trading, back office, IT etc are all outsourced. We’ve got a low cost base compared to banks with those steps in the value chain in-house.”
The bank will charge an annual management fee of 0.6-1.5% of assets held and, while there is no minimum threshold, clients are likely to place at least SFr 400,000-500,000 ($425,000-530,000) with Globalance, he added.
Ringger said that the bank expects to break even within three to four years, for which it would require SFr 700 million-1 billion in assets under management. The German-speaking high net worth individual market is worth some SFr 180 billion, he said, and noted that a recent study by the European Social Investment Forum found that rich individuals are placing an average of 11% of their portfolios in sustainable investments.
The bank is seeking regulatory approval to operate in the Nordic market, which will take around 12 months. “The Far East is also an interesting market,” Ringger added.
The five-person board of directors comprises:
•Felix Ehrat, chairman, who is senior partner and chairman of the board of law firm Bär & Karrer;
•Thomas Kubr, founder and CEO of Zug-based asset manager Capital Dynamics;
•Joachim Schoss, member of the board of directors of media company Goldbach Group and newspaper group Neue Zürcher Zeitung;
•Diana Strebel, entrepreneur and member of the board of directors of Swiss medicinal herb company Ricola; and
•Louis Graf von Zech, member of the board of directors of BHF-BANK Frankfurt.
Ringger founded Sustainable Asset Management (SAM) in 1995, an investment group that today manages assets worth more than €11 billion ($15 billion). He left in early 2009 after Robeco took a majority stake in SAM.
Mark Nicholls
