Swiss success story gives Britain the edge

Man's acquisition of RMF will create the world's biggest fund manager Keystone Archive

The sale of Swiss fund manager, RMF Investment Group, to a British rival is the culmination of ten years' work by its founders.

RMF announced this week that it was to be acquired by Britain’s Man Group for $833 million (SFr1.3 billion). The move will turn Man into the world’s largest fund manager, with $20 billion worth of assets under management.

Almost half those assets – $8.18 billion worth – are managed by RMF, which is based in Pfäffikon near Zurich.

Man justified the high purchase price by pointing to RMF’s profit margins and high growth. Last year the company recorded a profit of $40 million.

The deal shows how far the Swiss company has come since it was founded by the then 29-year-old Rainer-Marc Frey and Adrian Gut in the early 1990s to manage hedge funds. RMF now employs 180 people who between them own one third of the company’s shares.

Goals fulfilled

For Frey, the son of a banker and himself a trained economist, the purchase marks the fulfilment of his early goals of making money and building up a good business.

In an interview with swissinfo, Frey described the agreement with Man as “the largest deal I’ve ever done… It’s ten years of very intensive work by my partners and myself.”

Frey said the decision to sell was a strategic one, and not based on necessity. “We basically traded a private equity, closely-held firm in Pfäffikon for a FTSE 100 company in one go,” he told swissinfo.

Man Group analyst, Ian Hodges, said the acquisition would help raise the group’s profile in hedge fund management. “For Man Group it really means they’re moving into the Premier League in terms of hedge fund managers globally,” Hodges told swissinfo.

But Hodges also pointed to significant gains for RMF as a result of the deal. “They can enjoy a bright future in what is the world’s leading global hedge fund manager, and in that sense they should go from strength to strength,” he said.

Swiss insurers Swiss Life, Winterthur (owned by Credit Suisse) and Baloise are selling their combined 29.5 per cent stake in RMF as part of the deal.

Swiss Life and Credit Suisse account for about 60 per cent of RMF funds under management, and the success of the acquisition will depend on Man’s ability to retain those clients.

Frey said that both he and Adrian Gut have signed three-year contracts with Man. The two are former Merrill Lynch traders, and Frey has also worked for Salomon Brothers.

swissinfo