The Pictet Group

Last updated
The Pictet Group
Industry Private banking and financial services
FoundedJuly 23, 1805;213 years ago (1805-07-23)
FoundersJacob-Michel-François de Candolle and Jacques-Henry Mallet
Headquarters Geneva, Switzerland
Number of locations
27
Area served
Worldwide
Services Asset management, Wealth Management, Investment funds, Asset services and Trading
AUM Decrease2.svg CHF 496 billion [1]
Number of employees
4,358
Capital ratio 21.1 percentage
Rating Moody's: Prime 1/Aa2; [2]
Fitch: F1+/AA- [3]
Website http://www.group.pictet

The Pictet Group, known simply as Pictet, is a Swiss multinational private bank and financial services company founded and based in Switzerland. Headquartered in Geneva, it is one of the largest Swiss banks and primarily offers services in wealth management, asset management and asset servicing to private clients and institutions.

Private banks are the banks owned by either the individual or a general partner(s) with limited partner(s). Private banks are not incorporated. In any such case, the creditors can look to both the "entirety of the bank's assets" as well as the entirety of the sole-proprietor's/general-partners' assets.

Financial services economic service provided by the finance industry

Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises. Financial services companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers such as London, New York City, and Tokyo.

Geneva Large city in Switzerland

Geneva is the second-most populous city in Switzerland and the most populous city of Romandy, the French-speaking part of Switzerland. Situated where the Rhône exits Lake Geneva, it is the capital of the Republic and Canton of Geneva.

Contents

The Pictet Group employs around 4,300 people, including 900 investment managers. [4] [5] It has a network of 27 offices in financial services centres, including registered banks in Geneva, Luxembourg, Nassau, Hong Kong and Singapore.

Luxembourg Grand duchy in western Europe

Luxembourg, officially the Grand Duchy of Luxembourg, is a small landlocked country in western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France to the south. Its capital, Luxembourg City, is one of the three official capitals of the European Union and the seat of the European Court of Justice, the highest judicial authority in the EU. Its culture, people, and languages are highly intertwined with its neighbours, making it essentially a mixture of French and German cultures, as evident by the nation's three official languages: French, German, and the national language, Luxembourgish. The repeated invasions by Germany, especially in World War II, resulted in the country's strong will for mediation between France and Germany and, among other things, led to the foundation of the European Union.

Nassau, Bahamas Largest city and capital of the Bahamas

Nassau is the capital and commercial centre of the Commonwealth of the Bahamas. The city has an estimated population of 274,400 as of 2016, just over 70% of the population of the country (≈391,000). Lynden Pindling International Airport, the major airport for the Bahamas, is located about 16 kilometres (9.9 mi) west of Nassau city centre, and has daily flights to major cities in Canada, the Caribbean, the United Kingdom and the United States. The city is located on the island of New Providence, which functions much like a business district. Nassau is the site of the House of Assembly and various judicial departments and was considered historically to be a stronghold of pirates. The city was named in honour of William III of England, Prince of Orange-Nassau, deriving its name from Nassau, Germany.

Hong Kong East Asian city

Hong Kong, officially the Hong Kong Special Administrative Region of the People's Republic of China, is a special administrative region on the eastern side of the Pearl River estuary in southern China. With over 7.4 million people of various nationalities in a 1,104-square-kilometre (426 sq mi) territory, Hong Kong is the world's fourth-most densely populated region.

Pictet does not engage in investment banking, nor does it extend commercial loans. According to the latest Annual Report, the Group had 496 CHF Bn of assets under management, with its total capital ratio significantly exceeding the levels demanded by Swiss regulators. [6] Banque Pictet & Cie SA is rated Prime 1/Aa2 by Moody’s, [2] and F1+/AA- by Fitch. [3]

An investment bank is a financial services company or corporate division that engages in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket, Middle Market, and boutique market.

Fitch Ratings Inc. is one of the "Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission in 1975.

History

The Scripte de societe (memorandum of association) for the Banque De Candolle Mallet & Cie Scripte de societe Pictet page 1.png
The Scripte de société (memorandum of association) for the Banque De Candolle Mallet & Cie

Pictet traces its origin to the foundation of Banque De Candolle Mallet & Cie in Geneva on 23 July 1805. On that day, Jacob-Michel-François de Candolle and Jacques-Henry Mallet signed, with three limited partners, [7] a Scripte de Société (memorandum of association) to form a partnership. [8] Like all Geneva banks at the time, it started out trading in goods, but soon abandoned trading to concentrate on assisting clients in their financial and commercial business and advising them on managing their wealth. By the 1830s, it held a broad range of securities on behalf of clients, to diversify their risks.

The memorandum of association of a company is an important corporate document in certain jurisdictions. It is often simply referred to as the memorandum. In the UK, it has to be filed with the Registrar of Companies during the process of incorporating a company. It is the document that regulates the company’s external affairs, and complements the articles of association which cover the company's internal constitution. It contains the fundamental conditions under which the company is allowed to operate. Until recently it had to include the "objects clause" which let the shareholders, creditors and those dealing with the company know what is its permitted range of operation, although this was usually drafted very broadly. It also shows the company's initial capital. It is one of the documents required to incorporate a company in India, the United Kingdom, Ireland, Canada, Nigeria, Nepal, Bangladesh, Pakistan, Afghanistan, Sri Lanka, and Tanzania and is also used in many of the common law jurisdictions of the Commonwealth.

Security (finance) tradable financial asset

A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants. In some countries and languages the term "security" is commonly used in day-to-day parlance to mean any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition.

On the death of de Candolle in 1841, his wife’s nephew Edouard Pictet joined the partnership, and the name Pictet has remained with the bank ever since. Between 1890 and 1929, the Bank went through a period of substantial growth, the number of employees rising from 12 to more than 80 over 30 years. [9] Although the Pictet family had been intimately engaged with the bank since the mid 19th century, it was only in 1926 that the company changed its name to Pictet & Cie.

After a period of relative stagnation marked by the Great Depression of the 1930s and the Second World War, Pictet began to expand in the 1950s as the Western world entered a prolonged period of prosperity and economic growth. In the late 1960s, the Bank embarked on the new business of institutional asset management, which has since grown to account for around half its total assets under management. [10] In 1974, it opened an office in Montreal, the first of its current network of 27 offices around the world. Its workforce of 70 staff in 1950 rose to 300 by 1980. [11]

Great Depression 20th-century worldwide economic depression

The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries it started in 1929 and lasted until the late 1930s. It was the longest, deepest, and most widespread depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how intensely the world's economy can decline.

Western world Countries that identify themselves with an originally European shared culture

The Western world, also known as the West, refers to various nations depending on the context, most often including at least parts of Europe, Australasia, and the Americas, with the status of Latin America disputed by some. There are many accepted definitions, all closely interrelated. The Western world is also known as the Occident, in contrast to the Orient, or Eastern world.

Post–World War II economic expansion

The post–World War II economic expansion, also known as the golden age of capitalism and the postwar economic boom or simply the long boom, was a period of strong economic growth beginning after World War II and ending with the 1973–75 recession. The United States, Soviet Union, Western European and East Asian countries in particular experienced unusually high and sustained growth, together with full employment. Contrary to early predictions, this high growth also included many countries that had been devastated by the war, such as Japan, West Germany and Austria (Wirtschaftswunder), South Korea, France, Italy and Greece.

As of 2011, Pictet was Switzerland’s third largest wealth management company, and also one of Europe’s largest banks in private hands [12]

In 2014, Pictet changed its legal structure from a simple partnership to become a corporate partnership (société en commandite par actions) which acts as a holding company for the Group’s activities around the world. [13] Pictet did not publish its annual results during its 209 years as a simple partnership, but published annual results for the first time upon becoming a corporate partnership. [14] This was designed to enable the Group to manage its businesses in an international environment, [15] and also allows the eight partners who are owner managers of the Group to preserve the rules of succession which have remained unchanged for more than 200 years. Under those rules, ownership cannot be passed down to partners’ children: it is a temporary status which ends once a partner has retired. Partners hand over ownership of the Group in batches every five to ten years so that there are always partners from three generations connected to the family, to avoid problems that can arise with generational change. [12] To date, there have been only 43 partners. [16]

Pictet operates by assigning business activities and key functions like human resources, risk control and legal affairs to different partners. Small committees supervise the various corporate activities so that no single partner is solely responsible for an entire area. The Group’s Senior Partner, who is the most senior partner at the time of appointment, has oversight for areas concerning central corporate functions, such as HR, auditing, risk and compliance. [12] As primus inter pares, he chairs the partners meetings and represents the Group inside and outside the bank.

Structure

Wealth management

Pictet Wealth Management provides private banking expertise, wealth solutions for owners of larger fortunes and family office services for families of exceptional wealth. The services include dedicated asset management, advice on strategy and investment selection, execution in global markets, safeguarding client assets and continuous monitoring. For hedge funds, private equity and real estate investments, Pictet Alternative Advisors, an independent unit, selects third-party investment managers to construct alternative investment portfolios for investors. Pictet Investment Office, is a special unit within Pictet that only looks after the wealthiest and most sophisticated clients of the bank and invest their assets into liquid and illiquid opportunities, in public and private markets following a high risk/return strategy across the capital structure.

Operating out of 21 Pictet offices worldwide, Pictet Wealth Management had CHF 210bn of assets under management on December 31, 2018 and employed 882 full-time equivalent employees, including 310 private bankers. [4]

On November 26, 2012, it was reported that Pictet's wealth management unit was the target of a United States Department of Justice probe along with 11 other Swiss financial firms. The Department of Justice investigated banks that it suspected of aiding tax evasion. [17] Unlike the other firms, Pictet indicated that it would not book any provisions in its 2015 accounts and that its current capital reserves were large enough to cover any potential fine. [18]

Asset management

Pictet Asset Management manages assets for institutional investors and investment funds, including large pension funds, sovereign wealth funds and financial institutions. It also manages assets for individual investors through an extensive range of mandates, products and services. It provides clients with active and quantitative support for managing equities, fixed income, multi-asset and alternative strategies.

Since 1997, the department has been developing Socially Responsible Investments (SRI). It now manages SRI core equity portfolios for all major markets. It has also taken a thematic approach, focusing on environmental themes or sectors such as clean energy and timber that are key to the concept of sustainability. [19]

Operating out of 17 Pictet offices worldwide, Pictet Asset Management had CHF 171bn of assets under management on December 31, 2018 and employed around 917 full-time equivalent employees, including 381 investment professionals. [4]

Asset services

Pictet Asset Services provides a range of services for asset managers, pension funds and banks. These include: fund services for institutional or private investors and for independent asset managers; custody services in more than 80 countries; and round-the-clock trading across all significant asset classes by Pictet Global Markets. Fund services include setting up funds, administering them and fund governance. With ten booking centres accessing the single global platform, Pictet Asset Services had CHF 448bn of assets in custody on December 31, 2018 and employed a little more than 1,500 full-time equivalent employees. [4]

Prix Pictet

In 2008, Pictet launched the Prix Pictet, an award for photography highlighting societal interactions and problems. [20] Each year, nominated photographers are invited to submit a series of pictures on a chosen theme, such as "Water" (2008) and "Space" (2017). [21] [22] The winner is selected by an independent jury led by Sir David King. [23] Kofi Annan was president of the Prix Pictet from its founding in 2008 until his death in 2018. [24]

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References

  1. ↑ "Annual Report 2018" (PDF). 31 December 2018. Retrieved 13 May 2019.
  2. 1 2 "Moody's takes rating actions on Swiss banks". Moody’s Global Credit Research. 21 May 2015. Retrieved 1 July 2015.
  3. 1 2 "Fitch Affirms Banque Pictet at 'AA-'; Outlook Stable". Fitch ratings. 17 December 2014. Retrieved 1 July 2015.
  4. 1 2 3 4 "Annual review 2018" (PDF). group.pictet. 31 December 2018. Retrieved 13 May 2019.
  5. ↑ "Annual report 2014" (PDF). www.pictet.com. The Pictet Group. 31 December 2014. Retrieved 30 June 2015.
  6. ↑ "Bénéfice net et masse sous gestion record pour Pictet" [Record profit and AUM for Pictet]. Le Temps (in French). 7 February 2018. Retrieved 9 February 2018.
  7. ↑ Jean-Louis Mallet, brother of Jacques-Henry, Paul Martin and Jean-Louis Falquet
  8. ↑ "Pictet & Cie", 1805-1955, Atar, Geneva, 1955.
  9. ↑ Pictet Group Historical Archives, ref. AHP 1.1.7.1
  10. ↑ "200 years of History : one bank and the men who built it", Atar, Geneva, 2005.
  11. ↑ "Pictet & Cie, Genève : 1805-1980", Geneva, Atar, 1980.
  12. 1 2 3 Städeli, Markus (27 November 2011). "Eckpunkte einer langen Firmengeschichte" [Turning points in a long corporate history]. NZZ (in German). Zurich. Retrieved 30 June 2015.
  13. ↑ "Pictet et Lombard Odier tournent le dos à deux cents ans d'histoire". Le Temps (in French). 5 February 2013. Retrieved 2017-07-07.
  14. ↑ Chad Bray (26 August 2014). "Swiss Bank Pictet Reveals Results for First Time". The New York Times . Retrieved 13 May 2016.
  15. ↑ Sallier, Pierre-Alexandre (6 February 2013). "Schisme chez les banquiers privés" [Schism amongst private bankers]. Le Temps (in French). Geneva. Retrieved 30 June 2015.
  16. ↑ "Boris Collardi, une ascension-éclair dans le monde de la finance". Bilan (in French). 27 November 2017. Retrieved 2018-06-05.
  17. ↑ Giles (26 November 2012). "Pictet Targeted in Widening U.S. Probe of Swiss Wealth Managers". Bloomberg.com. Retrieved 30 June 2015.
  18. ↑ "États-Unis: Pictet & Cie attend une réponse" [United States: Pictet & Cie awaiting decision]. Tribune de Genève (in French). 13 January 2016. Retrieved 13 May 2016.
  19. ↑ "Socially Responsible Investment (SRI)". www.pictet.com. Pictet. Retrieved 30 June 2015.
  20. ↑ Lucia De Stefani (10 July 2015). "Finalists for Prix Pictet Photography Award Announced". Time . Retrieved 23 May 2016.
  21. ↑ Secher, Benjamin (2008-11-12). "The inaugural Prix Pictet: Kofi Annan and the elemental power of the image". ISSN   0307-1235 . Retrieved 2018-06-05.
  22. ↑ O'Hagan, Sean (2017-05-04). "Prix Pictet 2017: Richard Mosse wins prize with heat-map shots of refugees". the Guardian. Retrieved 2018-06-05.
  23. ↑ Silva, Bianca. "12 Photographers Selected as Finalists for Prix Pictet". Time. Retrieved 2019-05-13.
  24. ↑ "Prix Pictet". The Financial Times. 3 July 2013. Retrieved 1 July 2015.
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