MutualFundWire.com: A Multinational's CEO Weighs In On Asset Management M&A

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Thursday, April 25, 2019

A Multinational's CEO Weighs In On Asset Management M&A

The bar for making asset management acquisitions is pretty high in the eyes of at least one publicly traded multinational's CEO.

Tidjane Thiam
Credit Suisse
CEO

"The way we look at it, we tend to wish our peers to do M&A because it's an opportunity for us to to better in the market," Tidjane Thiam, CEO of Credit Suisse [profile], told analysts yesterday on the Swiss giant's Q1 2019 earnings call (as transcribed by Seeking Alpha). "We are cautious in terms of inorganic growth ... We think that particularly in asset management, those are tricky."

Thiam, responding to a question from J.P. Morgan analyst Kian Abouhossein, went on to say that price is a key factor in M&A, asset management or otherwise.

"It's very hard to get the right price because if you're buying from owners, managers, my short advice is don't because if they're willing to sell ... you're probably paying more than it's worth," Thiam said. "Unless they have some specific reason in their life that they want to sell. Then you're getting to all these issue of retention and it's messy, very difficult."

"Integration issues" can be another negative factor, Thiam added.

As of the end of Q1, Credit Suisse's asset management arm had 404.5 billion Swiss francs ($385.89 billion) in AUM, up 4.1 percent for the quarter. The unit brought in 121 million Swiss francs ($118.43 million) in Q1 income before taxes, up eight percent for the quarter and up 46 percent year-over-year. The unit is part of international wealth management, which is led by Iqbal Khan.

Printed from: MFWire.com/story.asp?s=59631

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