Swiss bank adds to growing roster of non-Swiss private-client acquisitions. Zurich-based private-banking group EFG International has agreed to buy Miami-based hedge-fund manager PRS Group. EFG International says the acquisition will give it access to private clients with "substantially" bigger average account sizes than its existing client roster.

PRS Group manages about $2.5 billion in proprietary funds and proprietary funds of hedge funds, mainly for wealthy private investors.

Good for them

"The acquisition of PRS Group is another important step in the development of our private-banking franchise while at the same time enhancing our hedge-fund asset-management profile," says Lawrence Howell, CEO of EFG International. "We look forward to having on board a high-quality team of seasoned and experienced entrepreneurs in the private banking field."

PRS didn't issue a statement or respond to requests for comment on the deal, which EFG International expects to complete in early February 2007. No one is saying how the transaction is to be structured -- save that it's "in line with EFG International's criteria on pricing and structuring, including an earn-out element" -- or what EFG International will pay for the hedge-fund manager.

Putnam Lovell NBF was PRS' financial advisor in the deal with EFG International.

In addition to boosting EFG International's assets, acquiring PRS will give it a chance "to realize revenue synergies by capturing banking services which currently are outsourced by PRS to third-party banks," EFG International says in a press release.

The deal works for PRS, EFG International ventures to add, because "the association with EFG International will provide [it with] access to a wider range of private banking-services including access to a global custody and administration network."

Gonzalo Rodriguez-Fraile, PRS' board chairman, and John Sullivan, its president, founded the firm in 1981. They and other senior executives of the 46-person firm own 75% of the business. Geneva-based Banque Piguet & Cie, a subsidiary of Lausanne -based Banque Cantonale Vaudoise, owns the remainder.

Auslaendisch

EFG International is an acquisitive firm, even by Swiss standards. In November 2005, it bought London-based Chiltern Group 's wealth-management arm. In a more complicated deal completed in mid 2005, it purchased two of its sister companies-- London-based EFG Private Bank and Monaco-based EFG Eurofinancière d'Investissements -- from an affiliate of Geneva-based EFG Group, its own corporate parent.

Earlier in 2005, EFG International bought Dresdner Lateinamerika Financial Advisors, Dresdner Bank's Caribbean and Latin American brokerage business, and folded it into its Miami-based broker-dealer EFG Capital International. Dresdner is part of Frankfurt-based Allianz Group.

Swiss banks have spent the past eight or 10 years staunching outflows of foreign-owned private-client assets -- partly the result of foreign-government efforts to keep assets at home, partly because of competitive pressure from non-Swiss wealth managers -- by purchasing foreign wealth-management firms.

Zurich-based UBS has led the way, gobbling up retail brokerages, private banks and multi-family offices around the world.

Other Swiss wealth managers see domestic consolidation as the way forward. Two months ago Zurich-based Julius Baer -- which sold its U.S. private-client business to UBS in 2004 -- bought three locally-focused Swiss private banks and an alternatives manager from UBS. More recently, however, Julius Baer re-joined the rush abroad by establishing offices in Hong Kong and Singapore.

Zurich-based Credit Suisse has also been balancing home-market consolidation with international expansion, amalgamating four disparately branded Swiss banks and a securities dealer while acquiring a Brazilian wealth-management firm and opening new private-client offices in the U.S.

EFG International says it has other acquisition targets in its sights and plans to add as much as $12.2 billion to its assets under management this year and as much again next year. -FWR

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