Credit Suisse Shifts U.S. Focus
NEW YORK - In a strategy shift, Credit Suisse has handed off asset management for U.S. institutions and will focus in this country on serving wealthy individuals.
As part of the buildup in private banking, the Switzerland-based company plans to add marketing offices in Miami and Los Angeles this year and expand its portfolio management group, Credit Suisse Asset Management.
The institutional business has been turned over to BEA Associates Inc., which Credit Suisse bought an 80% stake in last year. The New York-based manager of pension funds has about $11 billion under management.
To better serve wealthy individuals, Credit Swiss Asset Management will expand to about 15 staff members from 8. Most of those added will be specialists in bonds and equities.
The bank has hired Kenneth J. Tarr as president and chief investment office of the asset management unit. Mr. Tarr, 46, previously worked for Bessemer Trust Co., where he had handled portfolio management, investment research, and client account management. He replaces Gordon Bowyer, who left Credit Suisse earlier this year.
Francoise Soares-Kemp, former head of corporate foreign exchange business in New York, has also moved to the private banking unit. Ms. Soares-Kemp, 50, takes responsibility for marketing treasury products to private banking clients, about half of whom are from Latin America.
Credit Suisse has been working for several years to develop private banking operations outside Switzerland.
Jorg Schwarzenbach, a member of the bank's senior management formerly in Switzerland, moved to the United States several months ago to revamp the private banking operation here.
Mr. Schwarzenbach said the changes are aimed at capitalizing on the bank's strengths overseas. "We have long expertise and a good track record in international national asset management."
Although the bank does make loans to wealthy individuals, the bank's strategy is "not credit driven," he said.
Mr. Schwarzenbach declined to disclose assets under management for individuals but said deposits have climbed 50% at the New York branch this year. He attributed the increase primarily to the so-called "flight to quality" by clients of U.S. banks.
To qualify for private banking at Credit Suisse, individuals must have $1 million to invest. For portfolio management, the minimum is $3 million to $5 million.
Mr. Schwarzenbach acknowledged that the bank's strategy is similar to that of the other two big Swiss banks, Swiss Bank Corp. and Union Bank of Switzerland. But he added that Credit Suisse aims to gain an edge by providing better and faster service.
Corporate Business Slow
The push into private banking comes as prospects are slackening for U.S. corporate lending and foreign exchange trade, areas where the bank has been strong.
"Foreign exchange markets are going to dry up by the end of this decade, and corporations are overbanked," Ms. Soares-Kemp said.
She noted that plans to introduce a single currency in the European Community and growing coordination between the United States, Europe, and Japan on interest rates are limiting the appeal of foreign exchange trading.