The private banking arm of France's Société Générale is looking to enter the U.S. market through acquisition after agreeing to buy a Canadian wealth manager in November.
"We do not have a large enough presence in North America and are prepared to use acquisitions to develop our operation," Daniel Truchi, global chief executive of SG Private Banking, told Financial News. "We are interested in looking at opportunities in the U.S."
The bank is likely to employ the same strategy Truchi used to build its franchise across Asia soon after coming over from rival Crédit Lyonnais in 1996. In Asia, SG Private Banking profited by emphasizing safety, service-conscious advisers and fund researchers, and a wide range of investments, especially derivatives and structured products and global fund alternatives.
"Its advisers like the variety of tools they can use and their attrition rate is low," says Financial News. "To establish their remuneration, SG uses a wide range of factors, including data on client satisfaction. Protecting clients from loss is its top priority."
Derivatives allow SG clients to extend beyond traditional stocks and bonds to tap other sources of expected return, from volatility to weather, solar power or water. Truchi says "a few" clients have portfolios that are "100 percent structured products."
Along with the equity, bond and alternative investment funds run by affiliate SG Asset Management, SG Private Banking offers access to other fund families and employs 14 in-house researchers to select funds through both quantitative and qualitative screening methods.
SG's purchase of Canadian Wealth Management is expected to close in January after regulatory approval. The Calgary-based firm manages C$650 million of assets (US$643 million at current exchange rates). It serves private clients with comprehensive financial planning and retirement services, discretionary portfolio management, mutual funds, and tax and estate planning. Now, SG intends to add its structured products and alternative investments to the mix.
Paris-based parent Société Générale reported a third-quarter write-down of 230 million euros ($328 million at the Sept. 30 exchange rate) on U.S. residential mortgage-related trading positions, causing an overall loss of 277 million euros ($395 million) for its fixed income, currencies and commodities trading businesses. "But its problems are minor by US standards and unlikely to restrain Truchi's North American ambitions," Financial News says.
On Monday the company named Diony Lebot as chief executive of Société Générale Americas, responsible for overseeing Société Générale's corporate and investment banking activities in the U.S., Canada and Latin America.