x Abu Dhabi, UAEMonday 24 July 2017

Abu Dhabi bank Falcon on the hunt for acquisitions

Falcon Private Bank is seeking to invest as much as $4bn to grow its emerging market business.

Falcon Private Bank is back on the acquisition trail with the Abu Dhabi-owned institution seeking to invest as much as US$4 billion (Dh14.69bn) to grow its emerging market business.

The lender, which specialises in catering to high net worth individuals, is seeking to expand its reach throughout emerging markets, as governments in developed markets seek to clamp down on private banks and the industry is forced to consolidate.

"We're not relying on organic growth," said David Pinkerton, the bank's chief investment officer.

The bank has not named targets and says it is in no rush to make acquisitions, but is evaluating several options.

"The wealth management industry globally is being forced to consolidate. There's increasing costs on the regulatory side," added Mr Pinkerton.

"Small wealth management boutiques with $1bn of assets under management are finding it very difficult to cover costs and survive independently."

The bank says its ideal acquisition target would be in a range between $500 million to $4bn, said Mr Pinkerton.

"We won't go out and acquire something triple our size and increase integration risk," he said.

Falcon Private Bank is 100 per cent owned by Aabar Investments, an Abu Dhabi Government investment fund.

The bank was formerly a unit of the bailed-out insurance group AIG, one of the highest profile victims of the global financial crisis of 2008.

Since acquisition by Aabar in 2009, Falcon has grown to a total size of $12bn in assets under management, with about $1.2bn of that total in the Middle East and North Africa.

Falcon acquired Clariden Leu Europe earlier this year, a London-based unit of Clariden Leu focused on emerging markets, which was in the process of being integrated by Credit Suisse.

Credit Suisse is to retain the remainder of Clariden Leu's operations.

The deal is expected to close in the first quarter of next year.

ghunter@thenational.ae