City A.M. Reporter
JULIUS Baer will buy ING’s Swiss private banking assets for SFr520m (£317m), in the European wealth management industry’s biggest deal since the crisis began.<br /><br />Baer is paying about 2.3 per cent of assets under management (AUM) for the business excluding surplus capital, and about three percent including the surplus, roughly in line with expected valuations.<br /><br />Before the financial crisis, similar deals attracted prices above five percent of AUM.<br /><br />Julius Baer is paying cash and expects the deal to generate SFr35m in cost savings and to add to earnings from 2011. The ING unit has about SFr15bn in assets under management, including surplus capital of SFr170m.<br /><br />Baer recently built its war chest by listing its US asset management arm Artio. Last week it separated off asset management arm GAM Holdings in a bid to free itself up for dealmaking.<br /><br />Ranked after UBS and Credit Suisse as the third biggest wealth manager in Switzerland, Baer is also seeking to build Asia as a second major market.<br /><br />With the deal, expected to close early in 2010, Julius Baer said it would have SFr160bn under management.<br /><br />ING said the deal would deliver €150m of profit and free up €250m of capital, and is also selling its Asian assets.<br /><br />“We are not very optimistic about the price of ING’s Swiss private banking activities, but expect better multiples for ING’s Asian private banking arm,” SNS Securities analysts said in a research note.<br /><br />The sale of the Swiss assets came more than a month after most bids for the private banking units were made on 3 September. The sale of the Asian assets could take more time because of regulatory issues.