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Euromoney Awards for Excellence 2006
Global Best Bank I Global Best Investment Bank I Global Best M&A house I Global Best investment-grade debt house I Global Best leveraged finance house I Global Best ABS house I Global Best project finance house I Global: Best equity house I Global Best equity-linked house I Global Best structured product house I Global Best risk management house I Global Best commodities house I Global Best credit derivatives house I Global Best CDO house I Global Best foreign exchange house I Global Best cash management house I Global Best investor services house I Global Best private bank I Global Best private equity house I Global Best hedge fund manager
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Also shortlisted in this category: UBS JPMorgan Private Bank |
| Damian Kozlowski: clients have common challenges of illiquidity and concentrated risk |  |
The bank has identified specific groups of clients that can best utilize the firm’s risk management expertise. “We see three primary types of investors that are driving wealth creation around the globe: financial sponsors, real estate investors and entrepreneurs,” says Damian Kozlowski, global CEO of Citigroup Private Bank. “These clients by the nature of their business have common challenges of illiquidity and concentrated risk. We work with them to build their business while constructing a portfolio that is as uncorrelated as possible to the risks inherent to their business.”
In order to serve these clients, Citigroup Private Bank uses its own balance sheet or works alongside Citigroup’s investment bank to access financing during the wealth creation stage of client’s lives. “These types of clients need liquidity solutions and we can advise on raising capital and liquidity events,” says Kozlowski.
The bank has also created innovative products specific to its client base. On the basis of studies of the common characteristics of the commercial real estate market and the broad equity universe, the firm recently launched two separate real estate factor tilted portfolios that can either counterbalance or enhance investments in the real estate market.
In the US, client segmentation has enabled Citigroup to differentiate itself from its peers, which have tended to emerge from trust businesses or retail brokerages. In Asia, the strategy has enjoyed significant success, attracting more than $60 billion in client assets and earning Citi a reputation for being at the forefront of innovative products. In Euromoney’s 2006 private banking survey, Citigroup ranked first in Asia in FX, structured products, real estate investment, hedge fund investments, private equity investments and corporate advisory services. Indeed, with the exception of Japan, Citigroup clearly dominates the Asian private banking industry. It has offices in 11 countries in the region and manages money for half of Asia’s (ex-Japan) billionaires. Since June 2005, the bank has increased its headcount in India by 50% and will soon be announcing a business head for the region. In March this year, it opened its first private bank in mainland China in Shanghai in anticipation of the huge growth in wealth in the country, and hopes to open another office in the near future.
The private bank’s expulsion from Japan in 2004 unfortunately taints the otherwise strong appeal of the bank in Asia. However, Kozlowski says that important lessons were learnt from the experience that should benefit the private bank worldwide. “We’re going to do everything in our power to make sure that we’re in lockstep with the laws and regulations of the countries we’re in and to not do anything that would prevent us from moving forward. I believe that something like that will not happen again.”
The private bank also has a strong presence in the Middle East, where it ranks first in the fast-growing wealth management market. This year offices were opened in Bahrain to augment those in Dubai and Abu Dhabi. And in Latin America, headcount in Brazil has grown 25% over the past 12 months.
The last piece in Citigroup’s global jigsaw is western Europe. Like other non-European players, Citigroup has found it difficult to make itself noticed in the fragmented market. Kozlowski is positive, however, that the firm now has a recognizable strategy in the region. “We have great clients in Europe and have a fairly large business, but our problem is that we have acted like a traditional private bank in Europe. We were basically doing what our competitors were doing, but not as well. And haven’t been forward-thinking enough. So we’ve taken a good look at what makes us successful in Asia and the US and are seeing where in Europe we can be valuable. We’re good at servicing private equity sponsors and entrepreneurs elsewhere in the world, and those are client segments that we’re restructuring to focus on in Europe.”
In Euromoney’s 2006 private banking survey, the bank ranked eighth in Europe, compared with 23rd the previous year.
Global Best Bank I Global Best Investment Bank I Global Best M&A house I Global Best investment-grade debt house I Global Best leveraged finance house I Global Best ABS house I Global Best project finance house I Global: Best equity house I Global Best equity-linked house I Global Best structured product house I Global Best risk management house I Global Best commodities house I Global Best credit derivatives house I Global Best CDO house I Global Best foreign exchange house I Global Best cash management house I Global Best investor services house I Global Best private bank I Global Best private equity house I Global Best hedge fund manager
