Pictet, Lombard Odier both set to switch structure to corporate partnerships
Both Pictet and Lombard Odier have announced they are to change their legal structures to corporate partnerships or “société en commandite par actions de droit suisse” (SCA).
Both firms, headquartered in Geneva and with eight managing partners each, will effect the change from January 1, 2014. They cited business expansion and growing complexity for the change, and pledged to maintain the principles and values of their respective organisations.
Lombard Odier, which can trace its roots back to 1796, said the firm will remain under the ownership, management and control of the managing partners, “whose collegiate governance, business culture and values are unchanged”.
Pictet said its independent status remained unchanged, adding: “…Unchanged also is the sense of personal responsibility and prudent risk management that has characterised the Pictet Group since its foundation, which will remain an essential characteristic of its governance.”
“The Group’s equity levels and the quality of its balance sheet will also remain unchanged. It does not affect the Group’s collegial and entrepreneurial management culture, nor is the personal commitment of the partners in the strategic management of the Group affected in any way. Finally, this change has no implications for the continuity of the bank’s teams and management, or for the organisation of its business units.”
Lombard Odier’s activities in Switzerland will be managed as a limited company, already the case for all operational subsidiaries of the Lombard Odier Group.
“This evolution is the result of a discussion over many years between the Managing Partners, in order to equip the Group with the most efficient and solid structure to allow the Firm to maintain its business culture while continuing its development,” a statement said.
For Pictet, the new structure will bring together the management of all Group operating companies. The Group’s Swiss bank, Pictet & Cie, currently the only operating entity that has the legal form of a general partnership, will become a limited company alongside all the other banks of the Group (Luxembourg, Nassau and Singapore).
Both Lombard Odier and Pictet Groups have seen considerable growth in recent years.
In 1992 the Lombard Odier Group managed CHF36bn with 650 staff based mostly in Geneva. It now has CHF188bn under management and custody with almost 2,000 employees across 24 sites worldwide. In 2012, assets under management increased by more than 15%.
In 1980 the Pictet Group had 300 employees, chiefly based in Geneva, and CHF9bn under management. It now has 25 offices staffed by more than 3,300 people around the world and manages CHF374bn. In 2012, it saw more than CHF13bn in net inflows, and an increase of over 100 employees. It plans to recruit approximately 100 people in 2013.
Both firms believe the new structure, where the SCA becomes the holding company of the operating entities of the Group, will mean a clearer and more streamlined organization, better suited to international demands.
“This legal structure allows us to maintain the benefits of a private partnership, such as our independence, strict sense of responsibilities and our long-term management outlook while ensuring that our interests remain aligned with those of our clients,” said Patrick Odier, senior partner of Lombard Odier & Cie.
The bank said that for clients and staff of the bank in Switzerland, the evolution is “essentially legal” in nature. Its commercial organization will be unaffected and its activities in the areas of wealth management, asset management and support will continue unchanged.
Thierry Lombard, a managing partner of Lombard Odier & Cie, said the decision had been taken “from a position of strength”.
Both firms also pointed out that the parent groups hold capital well in excess of Swiss legal requirements, which are amongst the most stringent in the world.