How a new player brings new ideas into the sector
Private banking can be an overly traditional industry, set in its habits and way. There aren however, a number of new firms looking at it differently; St Gotthard Fund Management is one of them. Patrick Brusnahan writes
riginally set up as a family office, St Gotthard is opening itself up for new clients. Not only that, but it also wants to make a good experience for new clients.
Led by former Falcon Private Bank CIO Stefan Bollhalder, former Citibank executive Vladimir Vishnevskiy, and HNWI and entrepreneur Sergey Radchenko, the bank wants to be strongly aligned to clients’ interests.
The founders got together for a “brainstorm” in Cyprus and, according to Vishnevsky, “had a discussion about what we felt were problems that could be solved by starting our own company”.
Speaking to PBI, Bollhader says: “The larger the company, the more I would say, you get dragged away by the wrong reason, such as politics and other stuff.
“I would say maybe 10-15 years ago, the relationship manager at the bank was probably more on the side of the client.
“Now we have the motivation to do something, which I believe is more for the client.”
Private banks need to know their clients extremely well to serve them. This can lead to an unwieldy process with questionnaires and meetings; St Gotthard aims to make this easier.
Vishnevsky says: “During our brainstorm in Cyprus, we singled out certain areas of the market, or certain processes, that the bank and other investment managers go through where we thought there was room for improvement. There were some weaknesses – AML and KYC, especially.
“Today that's paid dividends because it's not a sexy area, it's not something that everybody focuses on.
“It's a lot of paperwork, a lot of papers, and you need to have attention to detail. It's definitely not very interesting; however, your ability to work with the client and take out most important issues, that's where we decided to focus our attention – to be in-between the bank and the client, basically, as an external asset manager, and really make a frictionless onboarding process. We want to limit the interaction between the bank and the client, ask all the right questions ourselves, and then present that to the bank."
The gold standard
Vishnevsky continues: “We think the gold standard is now to be able to onboard a client within a month, especially from an emerging market like the UAE. Most other banks right now, if you come to them just through the front door, they would say three months is your standard time, which is for a lot of clients just too long.”
The firm also has a focus on digital assets and crypto funds. This is part of the reason St Gotthard decided to headquarter in Zug, Switzerland's so-called Crypto Valley, and a “natural choice” of location.
St Gotthard aims to have $100m in assets under management by the end of the year. It needs to be different enough to capture attention, but also deliver traditional returns to capture clients.