JULIUSBAER/ASIA (UPDATE 1)-UPDATE 1

Trade the News

Monday September 06, 2010 07:25:06 AM GMT

* Asian AUM could grow to 20-25 pct of total in 5 years

* Has 1.2 bln Swiss francs in excess capital for M&A

* Clients still pulling money out of hedge funds, pvt equity (Updates with details, background)

By Kevin Lim

SINGAPORE, Sept 6 (Reuters) - Julius Baer , Switzerland's third largest private bank, plans to double Asia's contribution to 20-25 percent of assets in five years as it recruits new staff and opens more offices in the region.

Julius Baer, which has 166 billion Swiss francs ($163.2 billion) in assets under management as of end-June, currently derives the bulk of its business in Europe with Asian clients accounting for just over 10 percent of AUM.

But the bank has identified Asia as its "second home market" and its expansion plans include upgrading its Northeast Asia headquarters in Hong Kong to a booking centre before year-end and opening a representative office in Shanghai next year.

Julius Baer also plans to set up a trust office in Singapore to advise clients in areas such as estate planning, CEO for Asia and the Middle East Thomas Meier said on Monday.

"We are trying to move into a (Singapore) office space that can house 700 people," he said when asked about new hirings. The bank employs over 400 people in Asia, the majority of them in Singapore.

Julius Baer CEO Boris Collardi said the bank was keen on "selective acquisitions" and has excess capital of 1.2 billion Swiss francs available to support its growth strategy.

"We would love to buy something in Asia... The problem is everybody wants to buy but nobody wants to sell," he said.

Julius Baer's Asian operations have seen double-digit increases in new client money and Asia's millionaires will likely see assets grow by an average of 13 percent annually in the next five years, he added, citing a report by Merrill Lynch and Capgemini.

The bank said it also hopes to "grow opportunistically" in central and eastern Europe as well as in Latin America, the Middle East and Indian subcontinent but will continue to shun the United States.

Collardi said private banking clients were still moving their wealth out of hedge funds and private equity even as institutional money returns to the sector.

Private clients were still cautious in their outlook and the more popular investments at the moment included gold and foreign exchange, he said.

Julius Baer, Switzerland's third largest wealth manager after Credit Suisse and UBS , has emerged strongly from the financial crisis. The firm has tier-one capital of 23.8 percent, giving it ample room to grow its business aggressively.

(c) Copyright Thomson Reuters 2010. Click For Restrictions. http://about.reuters.com/fulllegal.asp