Ninth-generation Pictet leader banks on organic growth and partnerships
Striving, not for size but “to be the finest, as a wealth and asset manager known for superior returns and exceptional client experience” is what drives 46-year-old François Pictet, Managing Partner of Pictet Group.
He is a ninth-generation member of a family which became associated with Pictet Group in 1841. The Geneva-headquartered organisation, which turns 220 this year, traces its roots even further back, to its founding in July 1805.
François Pictet followed the footsteps of his father, grandfather and great-grandfather into the top echelons of the group’s management. Today, Pictet Group is Switzerland’s second-largest financial institution, behind UBS, and the largest privately held financial institution in Europe.
François Pictet sits alongside his cousin, Senior Partner Marc Pictet, and five other managing partners at the apex of the company’s management.
The seven top partners – six men and a woman, all based in Geneva – are a close-knit group that meets thrice a week, for several hours each time, to discuss strategies and investments.
“You cannot invite as managing partners people who want to decide everything and don’t want to listen to others. This type of profile will not make it,” said François Pictet.
He pointed out that while Pictet Group is unique in having a long association with his wider family, having the name alone does not mean guaranteed entry into the group’s top leadership.
In addition to the seven managing partners, Pictet Group has 43 equity partners. New partners buy shares at book value; when they exit, they sell their shares at book value, which would have, it is hoped, grown during their tenure. Partners retire at the age of 65.
To date, Pictet Group has grown organically and not undertaken any mergers and acquisitions. The group has also stayed out of business lines such as commercial banking, retail banking and investment banking.
“Why would you make an acquisition unless you want to show growth to your shareholders? In finance, growth by hiring the right people is more effective,” said François Pictet, adding that making acquisitions can harm the corporate culture.
He likes the group’s business model, which he sees as being differentiated from other financial institutions and brings stability to the business and clients.
Stability nowadays is in very rare supply, and I think this is a key advantage that we have.
He argued that by being conservative in how Pictet Group uses its balance sheet, space is freed up to be innovative in serving clients. “Our usage of the balance sheet is extremely conservative. We don’t play with it at all.”
François Pictet says: “Why would you make an acquisition unless you want to show growth to your shareholders? In finance, growth by hiring the right people is more effective.”
Personal journey
François Pictet, who became a managing partner in 2022, currently co-heads Pictet Wealth Management.
Trained in law, he said that it was “initially not really my intention” to join the family business.
He spent over a decade working for organisations including UBS, the former Credit Suisse and US private equity firm AEA Investors before joining Pictet Group in 2015.
Asked if carrying the Pictet name within Pictet Group is a privilege or a burden, he replied that “with the family name comes the pressure as well”.
He described working at Pictet Group as being in “a place where you have your name on the door, and the responsibility of not undoing the work done by eight generations before you”.
Still, when the opportunity to join the group came while he was in his 30s, he said that it would have been a waste not to seize it.
With Pictet Group today being considerably larger than in his father’s time, François Pictet thinks family members who want to join now or in future should spend some years outside the group to chalk some achievements before getting on board.
“It’s very important for our managing partners to have seen the world out there and also proven themselves outside the firm,” he noted.
In the private wealth management business, Pictet Group serves clients with a net worth of five million Swiss francs (S$8 million) or more. François Pictet sees no reason to lower this threshold for the sake of acquiring a larger customer base.
He emphasised that in the private wealth management business, much time is spent on understanding clients and their worry over money. Investment solutions then come on the back of understanding client needs. He added this is unlike “the brokerage model, where you start the discussion by talking about products”.
Our time horizon is not a quarter, not even 10 years. It is really generations with our clients.
François Pictet pointed out that amid geopolitical fragmentation, wealthy families have become more mobile, requiring all sorts of combinations of booking and servicing centres.
He said that Singapore, with its stability, has been on the rise as a booking centre for Asia for several years.
Other megatrends that he sees in the private wealth management business include generational wealth transfer, the rise of Asia, the growing importance of private equity and the need to invest more in technology, and on risk and compliance.
Generational wealth transfer
Honora Ducatillon, head of family advisory at Pictet Wealth Management, said that with dynastic families, Pictet Group is seeing growing demand for help in crafting a family charter, as a framework for long-term success. Dynastic families are defined as those having a net worth of US$100 million or more.
Typically, a family charter may cover areas such as family mission, family values, code of conduct, conflict resolution, succession in ownership and management, governance bodies, access to capital, family members, employment, ownership policy and education of family members.
Ducatillon added that wealthy families are evolving with trends such as longevity and the rise of the 100-year-old chief executive. Also contributing to this evolution are accelerating shifts in sociocultural values, the increase in blended families, the rise of women wealth owners, the move from top-down to collaborative governance models, and technology’s role in transforming how families institutionalise wisdom across generations.
Citing a McKinsey report, she noted that some US$5.8 trillion in assets will be transferred between generations in the Asia-Pacific between 2023 and 2030 by wealthy families, and that many family offices report that preparing the next generation to take on wealth responsibly is a major challenge.
