Project Overview

Target Data*

14-16x
Target PE Multiple
11-23%
Target IRR
5yr
Time Horizon
20bn
Target Group Scale (CHF)

At a Glance

Aim
To establish a new premium banking and wealth management group in Switzerland.
Offering
We are seeking to raise up to CHF 100 million for economic rights totalling 49% of the combined group. Hussam and Mutaz Otaibi will act as founding partners.
Acquisition strategy
The business plan assumes the acquisition of a private bank with net capital of around CHF 80 million, followed by a series of acquisitions of five EAMs, each managing assets of around CHF 3.5 billion. The target scale of the group after five years is CHF 20 billion.
Potential returns
We believe that through diligent integration, the group will achieve cost savings of at least 25% while also significantly boosting top-line growth through revenue synergies. We believe a combined price-earnings (PE) multiple of between 14-16 times is achievable, to gain cash-on-cash returns of between 1.5-2.5 times and an internal rate of return (IRR) of between 11-23% (see Financial model for detail).
Horizon
We have modelled the business on a five-year time horizon, with potential for exit (via acquisition or IPO) at the end of the period.
Structure
UK holding company (Holdco) will have controlling interest of the group, with a Swiss company (Swissco) acting as the main platform to acquire the bank and EAMs.
Potential risks
Investments in early-stage companies naturally come with risk. Start-up companies inherently have a higher failure rate and the market is illiquid and opaque. Exposure should be considered within a global portfolio diversified across equity and debt strategies, and sized according to an investor’s risk appetite and goals.
  • Capital is at risk. The value of the investment may fall as well as rise and this means you may lose some – or all – of your investment
  • Tax treatment will depend on individual circumstances and may be subject to change in future
  • Changes in currency exchange rates may cause the value of your investment to rise or fall
  • The group has concentrated exposure to specific sectors (banking and wealth management) in a specific country (Switzerland). This means the value of the group can be adversely impacted by market news and events in those sectors
  • Early-stage, privately-held companies can be more volatile than publicly-traded companies. They can be difficult to value or to sell at desired times and prices, increasing the risk of losses

Advisory Team

Oliver Wyman

Oliver Wyman

Strategy Advisers
Herbert Smith Freehills

Herbert Smith Freehills

Lawyers (UK)
Borel & Barbey

Borel & Barbey

Lawyers (Switzerland)

Strategy Overview

1

Acquire infrastructure

Combine these managers with a dedicated and fully-licensed Swiss private bank to provide a premium service to the customers and achieve significant synergies.

2

Centralise resources

Acquiring the Swiss private bank first will provide the infrastructure – such as the back office, legal and compliance, risk, IT and investment products – for EAMs to leverage at a fraction of the cost that they would have to assume on a standalone basis.

Successful combination of these managers with the private bank will depend on detailed planning and integration of the back-end systems and shared functions. Careful selection of acquisition targets would be critical to ensure the ease of integration.

3

Retain key personnel

Each subsequent acquisition of a manager should be structured to ensure maximum retention of key front-office personnel and corresponding assets. Deferring consideration in the form of structured earn-outs would help ensure minimisation of customer attrition.

The projected figures stated on this page are no guarantee of results. Such forecasts are not a reliable indicator of future performance. All investors should note that their capital is at risk, and the value of their investment may go down as well as up. There is a risk that each investor will lose some or all of their investment.