Raymond Sagayam on Pictet’s growth in Spain

Spain has emerged as one of Pictet’s strategic markets. For the Swiss financial services group, the Spanish market has become an engine of growth, driven by sustained inflows from wealthy Latin American clients and strong appetite for alternative investment opportunities.

The firm, which manages nearly USD 1 trillion in assets worldwide, does not break down assets under management by local market. Nevertheless, it reports consistent annual growth in assets. “Growth has been a constant for us, and we expect that to continue. Today, Spain ranks alongside Italy and France in strategic importance for our wealth and asset management activities, while Switzerland remains our largest market,” says Raymond Sagayam, one of Pictet’s seven Managing Partners and Co-CEO of its asset management business.

Pictet first established its asset management operations in Spain 25 years ago and launched its wealth management operations 15 years ago. Historically, growth in the Spanish market has been led by the Group’s asset management business. More recently, however, private banking activity has accelerated significantly.

“Over the last 25 years, Pictet Asset Management has grown steadily, benefiting from the transition of retail savers into fund investors,” says Sagayam. “In wealth management, however, we have begun to experience a marked increase in business volumes, driven by substantial inflows of Latin American entrepreneurial and family wealth. This is a relatively new trend.”

New clients

The influx of Latin American private wealth into Spain has become a major growth opportunity for institutions with specialist private banking operations servinghigh-net-worth clients.

Leading Spanish banks have been expanding their private banking teams and upgrading their premium client offerings in response to the steady flow of capital into Madrid from Latin America in recent years. International institutions are also increasing their presence.

“This represents an opportunity at both the national and international level. The market is sufficiently deep to accommodate domestic institutions as well as international banks such as ours”, says Sagayam. The Group has recently bolstered its private banking team in Spain, with a particular focus on attracting new high-net-worth clients.

In Spain, Pictet advises clients with investable assets of more than EUR 10 million.

The firm is also extending its presencewithin the country. “In Spain, we are expanding our private banking activities from Madrid and Barcelona into regional markets, where the need for sophisticated wealth advice is growing,” adds Sagayam.

Alternative assets

Alternative assets represent a further source of growth for Pictet in Spain, as Spanish investors allocate a larger share of their portfolios to these assets.

“We are seeing growing appetite for private assets in Spain, where we provide access to private equity funds and locally domiciled bespoke private capital vehicles,” says Sagayam.

Pictet manages approximately USD 54 billion (EUR 47.2 billion) in alternative assets and believes some of the most attractive opportunities currently lie in real estate.

“The Spanish market offers a rich pipeline of opportunities. We see particular potential in the residential, hospitality and logistics sectors.” The Group is currently finalising the fundraising for its second European direct property fund, and is developing luxury residential projects in Madrid in partnership with major international hotel groups.

Acquisitions

Unlike many of its peers, Pictet has no plans to pursue inorganic growth. “We are not looking to grow through acquisitions,” says Sagayam. “Acquisitions are good for shareholders, not for clients. Many competitors rely on mergers and acquisitions to generate economies of scale. However, we are not in a race to gather assets at ever lower cost. Our priority is to preserve quality.”