Swiss private bank Notenstein has begun its campaign to become one of the country’s leading providers of sustainable investments, simultaneously launching 10 sustainable funds for institutional clients.
The funds include five that invest in equities, two balanced (equity/bond) products and three bond funds. As sustainable funds, the products offer investors the choice of excluding one or more sectors, including weapons, nuclear power, chlorine/agrochemicals, tobacco, pornography, gambling, airlines and companies with human rights violations.
While the institutions – pension funds, foundations and church investors – that Notenstein has in mind for the funds are primarily in Switzerland, the bank has also put together sales teams for Germany and Austria. The German sales team is led by Frank Wettlauffer, who had the same job at rival J. Safra Sarasin.
The bold product launch comes just five weeks after Andreas Knörzer became Notenstein’s new Head of Asset Management. Knörzer comes from Sarasin, which at last count was Switzerland’s leader in sustainable investments with CHF14.5bn (€11.7bn) in assets under management.
At Sarasin, Knörzer was also the asset management chief. His departure triggered a mass defection of around 50 sales and fund specialists from Sarasin to Notenstein.
In an exclusive interview at Notenstein’s base in St. Gallen, Knörzer said that while his first weeks at the bank had been intense, a lot of work on the funds had been performed since early October, when the first of the former Sarasin staff had joined Notenstein.He said: “If we can improve the world with our sustainable funds, great. But that’s not the reason why we do them. Instead, we know that sustainability is the intelligent way to manage a portfolio, as we have seen over and over again that the consideration of ESG (environmental, social and governance) criteria has a positive effect on the portfolio’s risk and return profile.” Also taking part in the interview was Adrian Künzi, Notenstein’s chief executive.
Including the former Sarasin staff, Notenstein’s asset management division for institutional clients has 80 employees. Knörzer leads a team of 40 analysts, portfolio managers and support staff in a new Notenstein office in Basle – just 300 metres from Sarasin’s office. The other 40 employees are Notenstein’s sales specialists led by Aris Prepoudis, another ex-Sarasin sales executive.
The vigorous expansion of the division has hit the bottom line but CEO Künzi replied that such a cost increase is to be expected when building a new business with the relevant professionals. “But anyway, we have these costs well under control and have a very stable set up with Raiffeisen as Notenstein’s cooperative bank parent. More important though is that, we are not caught in a strategic black hole.
“We know exactly what our strategy is, that is to become a leading sustainable fund provider in Switzerland and in Europe, and we are implementing it,” he said.
According to Künzi, Notenstein aims to raise its assets under management from institutional clients to CHF10bn by the end of 2017, up from CHF4bn currently. The bank also manages CHF18bn for private clients who Künzi says will now benefit from Notenstein’s sustainable investment approach.