Analysis: Sarasin – introducing new owners Safra and potential rival Notenstein

RI sheds some light on events at Swiss sustainability champion

The merger between Bank Sarasin, the well-known Swiss sustainable bank, and Bank Jacob Safra in Geneva has coincided with the departure of several senior personnel from Sarasin, including two top executives best associated with Sarasin’s sustainable strategy.

The executives, Andreas Knörzer and Aris Prepoudis, are joining Notenstein, another Swiss private bank, from December 1 in what looks to be a challenge to Sarasin’s lead position in sustainable investing.

But while many in the sustainable investment field will be familiar with Sarasin, few will be familiar with either Bank Jacob Safra or Notenstein.

Bank Jacob Safra is part of Safra Group, an international conglomerate controlled by the family of Joseph Safra, the son of Jacob Safra. Although originally Lebanese bankers, the Safra family moved to Brazil in 1955 where they launched Banco Safra in São Paolo and set the foundation for Safra Group. The Group’s banking empire has since grown to include affiliates in New York, Luxembourg, France, the Cayman Islands and the Bahamas – beyond the ones in Geneva and São Paolo. Safra Group entered the Swiss market in 2000 when it acquired the private bank Uto Bank AG. Joseph Safra then renamed it after his father.

Following its merger with Sarasin to form “J. Safra Sarasin Group,” the conglomerate says it will have CHF130bn (€104bn) in assets under management from private and institutional clients. It will employ 2,140 people at 30 locations worldwide. Joseph Safra will remain the Group’s chief executive, while Edmond Michaan, who currently heads the Geneva Bank, will take over as CEO of all the Group’s banking operations in Switzerland. Michaan has held managerial positions at Bank Jacob Safra since joining in 2001.Deputy head of the Group’s Swiss banking operations is Eric Sarasin. Bank Sarasin insists that these appointments and the replacements for the departed Knörzer and Prepoudis reflect its continued commitment to sustainable investment. At the end of 2011, Sarasin’s sustainably managed assets totalled CHF12.3bn, and the bank aimed to double that figure in 2012.

Until early 2012, few even in Swiss banking had ever heard of Notenstein, a wealth manager based in St. Gallen. Instead, they were very familiar with its parent, Wegelin & Co, formerly Switzerland’s oldest private bank. Wegelin launched Notenstein in 1968. Fast forward to January 2013: That month, Wegelin pleaded guilty to charges of tax evasion brought by the US authorities. The private bank then decided to close its doors after 272 years and had already transferred its non-US clients, assets and most of its employees to Notenstein in 2012. Notenstein was subsequently bought by Swiss cooperative banking group Raiffeisen, Switzerland’s leading retail bank with 3.7m clients and balance sheet assets of CHF168.1bn.

Housed in Wegelin’s former headquarters, Notenstein employs 700 people and runs CHF21bn, most of which for private clients. Its specialties include quantitative asset management, which it offers through a subsidiary named after Wegelin’s founding date of 1741. With the recruitment of Knörzer and Prepoudis from Sarasin, Notenstein aims to expand its institutional business, notably that from Swiss pension funds and foundations. And in that effort, Notenstein will place special emphasis on sustainable investing, says Notenstein CEO Adrian Künzl.