When David Coulthard drove racing legend Jim Clark’s Lotus 25 at Silverstone motor circuit last year, it was not only the former Formula One driver‘s heart rate that started beating faster.
Paul Denman’s did, too. The director responsible for media and sports at Arbuthnot Latham, a UK private bank, was excited to see Mr Coulthard racing in a car that sported the wealth manager’s logo on its side.
The picture of Coulthard in a 1960s car - the first to be built with a monocoque chassis - was on the front pages of several motorsport enthusiasts’ magazines, in newspaper articles and on television.
For Arbuthnot Latham, it marked the high point of a decade of motorsport sponsoring.
“In the past, not many historic racing cars carried logos,” Mr Denman says. “But now there is more of that and cars with our logo end up in races, museums and on TV.”
Motorsport sponsorships have been used by a number of private banks as a tool to enhance their brand name as well as to attract and entertain clients. It seems a natural fit, as many wealthy clients like motorsport.
But are there tangible benefits to sponsorship of such high-profile sports; and is it worth the large amounts of money?
For Jürg Zeltner, the answer is an emphatic “yes”. UBS, the Swiss banking behemoth whose wealth management arm he runs, is supporting the high-octane world of F1 as a global partner.
The bank’s logo is plastered on the sides of circuits that include Silverstone, Buddh International in India and Interlagos in Brazil, and can be seen by 450 million people on television.
When UBS started to sponsor the F1 Grand Prix series in 2010, its main ambition was to find a platform that could raise its brand awareness in emerging markets, the centres of growth in wealth management these days. As the largest wealth manager in the world by assets under management, the Swiss bank’s brand had huge strength in the west, but had not achieved the same recognition in countries such as China, Mexico or Turkey.
“We were looking for a global platform with high visibility and reach. There are very few of those,” Mr Zeltner says. Other possibilities would have included the Olympic Games, the FIFA World Cup or maybe tennis. But the huge crowd attracted by F1, its high frequency and its expansion into emerging markets were decisive factors behind UBS’s decision to back the motor sports.
UBS acts as a global partner to F1, which for the private bank has advantages over sponsoring an individual team. For one thing, it does not hinge on the success or failure of a particular team or driver. And second, it does not upset any of its clients who may be passionate supporters of a different team.
While the initial motivation was to raise brand awareness, UBS soon found there was an additional benefit from the sponsorship: client hospitality.
“Our clients have responded positively to our F1 engagement,” Mr Zeltner says. “So we have built out the client experience by taking them to the races.
“Today, our focus in F1 is on hosting high-profile client events, as opposed to further building our brand awareness,” he adds.
The bank now shepherds about 110-120 wealthy clients to each race - offering experiences such as flying them in on helicopters, a trip on the racing circuit with one of the drivers, a visit to one of the team garages or the chance to handsign one of the racing cars.
But supporting a high-profile sport such as F1 comes at a huge cost, with experts estimating that UBS’s sponsorship bill is tens of million dollars each year.
Worth the money
The Swiss bank’s entry into F1 already went against the grain in the banking sector. Dutch financial group ING severed its financial ties in the wake of the global banking crisis, while Royal Bank of Scotland stopped being a leading sponsor of the sport after it had to be bailed out by the state.
UBS does not comment on speculation that it might drop out as well. But bank insiders stress that so far the deal has been worth the money.
According to Mr Denman, the same applies to Arbuthnot Latham with its much lower budget for sponsorship of the UK’s Historic Grand Prix Cars Association. He says its involvement in classic motorsport has generated a lot of new business and continues to enlarge the bank’s client base among petrolheads.
“The primary aim for us is to meet new high net worth individuals,” Mr Denman says. “It is a wealthy person’s sport.”
Its intensive network among motorsport enthusiasts has even helped it to attract some professional drivers as clients.
But because of the private bank’s discretion, it remains unclear whether Mr Coulthard is among them.
‘We were looking for a global platform with high visibility and reach. There are very few of those’
Copyright The Financial Times Limited 2014
By Daniel Schäfer, Financial Times