Lombard Odier Review part 1 – that will be the topic of today’s article.
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In general, the banks are expensive and inflexible for most people, compared to the alternatives, which we can introduce, despite the positives that will be mentioned here.
Introduction
Lombard Odier Group is an independent Swiss banking group headquartered in Geneva. Its operations are divided into three divisions: private banking (wealth management), asset management, IT, and back and middle office services for other financial institutions. As of December 31, 2020, the bank’s client assets amounted to 316 billion Swiss francs, making it one of the largest players in the Swiss private banking sector.
The group was formed in 2002 as Lombard, Odier, Darier, Hentsch & Cie through the merger of Lombard, Odier & Cie and Darier, Hentsch & Cie. Since the latter was originally founded in 1796, the group claims to be the oldest private bank in Geneva. The company’s name was simplified to Lombard Odier Group in 2010, although the firm still includes the names of the four founding partners in its official logo. Since 2014, the bank has the status of a limited liability company (LLC).
Lombard Odier Group is a legal holding company under Swiss law and has been known as Lombard Odier Company SCmA since 2016. This holding company owns all the firms owned by the group, most notably the bank Lombard Odier & Cie SA and Lombard Odier Asset Management (Europe) Limited in London, which forms the group’s asset management arm. Lombard Odier Investment Managers (LOIM) is the name by which the group is known in the international wealth management arena.
Outside of Switzerland, the group has branches in the EU (centered in Luxembourg), London, Moscow, North America (New York, Bermuda, Bahamas), Latin America (Panama, Uruguay), Asia (Hong Kong, Tokyo, Singapore, Dubai, Tel Aviv, Abu Dhabi) and South Africa. Including a network of employees, the group has 2,560 employees worldwide.
Lombard Odier Main Services
This company operates mainly in three different segments and provides its clients well-cultivated services, let’s see each one’s overview, and after we will go deeper.
Wealth Management
The historical activity of the Lombard Odier Group is the management of the wealth of private clients (private banking). This operation primarily covers the provision of advice on asset management, financial investment, tax advice, and estate planning.
Wealth management operations are mainly controlled in Geneva, at Bank Lombard, Odier & Cie SA, as one of the companies owned by the holding company Lombard Odier Group. According to FY 2016 data, private banking operations accounted for CHF 112 billion of outstanding assets of their Swiss and international clientele, with about 50% of the total outstanding amounts managed by the Lombard Odier Group.
Asset Management
Lombard Odier also has a presence in asset management; it has several branches, the leading one being Lombard Odier Asset Management (Europe) Limited, a management corporation based in London. This firm uses the Lombard Odier Investment Managers (Lombard Odier IM) brand, by which the Group is known in the international asset management industry.
This operation mainly involves the management of investment funds placed in stocks and bonds, to which investments from hedge funds are added. These funds are also available to clients of the private bank Lombard, Odier & Cie SA, as well as to an international client base of institutional investors and financial advisors outside the Lombard Odier Group.
The firm is also active in the area of socially responsible investments, primarily offering a range of “investments with impact” on capital.
Lombard Odier IM has been active in the ETF (exchange-traded funds) space since 2015 after partnering with ETF Securities. The first Lombard Odier ETFs were launched in April 2015 to replicate the performance of indices in the bond market (government bonds, corporate bonds, and emerging market bonds).
In 2018, Lombard Odier IM was one of the first asset managers to go through a private blockchain-driven settlement process to purchase securities in the bond market. In 2016, the bank managed 48 billion Swiss francs in its asset management branches, which is about 20% of the total outstanding balances managed by the pawnshop.
Banking IT Services
Since 2014, Lombard Odier Group has been offering back and middle office IT services to other banking firms through a tool dubbed “G2”. This tool allowed users to manage their customer base and buy and sell securities on the market. Initially offered to six external institutions, G2 Pro has reached out to a dozen other banks as clients. Banking IT operations were piloted in 2016 in a separate company owned by holding company Lombard Odier Group.
Lombard, Odier & Cie SA is itself a client of the organization, as are external firms to which it may provide equipment. In 2016, this branch of the Lombard Odier Group managed CHF 63 billion from third-party clients, which is about 30% of the total outstanding balances managed by the Lombard Odier Group.
Lombard Odier Branches and international presence
Switzerland
Hentsch & Cie has been headquartered in Geneva since its founding in 1796. However, the location of the headquarters has changed over the centuries. In 1858 Hentsch & Cie moved to rue de la Corratrie in Maison Gallatin (built 1708). It remains the oldest head office of the Lombard Odier Group in Geneva.
Lombard, Odier, and Sy had moved into the house next door the year before. Between 1921 and 1924, the buildings owned by the banks Hentsch & Cie and Lombard, Odier & Cie, located on rue de la Corratrie, were rebuilt to add additional floors. In 1957, Lombard, Odier & Cie purchased the adjoining building at 9 rue de la Corraterie.
Before it was occupied by bank employees, it was completely rebuilt according to the design of the architect Antoine de Saussure. In 1990, all the administrative services of Lombard, Odier & Cie were merged into a property located in Lancie. Over the years, Lombard, Odier & Cie slowly expanded down the street, buying neighboring houses from their competitors.
In 2021-2022, Lombard Odier plans to build a new headquarters in Bellevue in the canton of Geneva, designed by the architectural firm Herzog & de Meuron. The building will be able to accommodate 2,600 employees to bring together all the bank’s employees, who have so far been scattered across six different offices in Geneva. Part of the original building, La Maison Gallatin, will be preserved, refurbished, and used for events.
Lombard Odier Group also has several branches and representative offices throughout Switzerland. The bank has been present in Lausanne since 1882, in Vevey and Zurich since 1989, and in Friborg since 2008.
Europe
Lombard Odier Group owns several subsidiaries in Europe, which were merged into one branch, which opened in Luxembourg in 2011. Thus, Lombard Odier’s group of subsidiaries in Europe were treated legally and financially as branches of its Luxembourg bank.
The Lombard Odier Group has had a London subsidiary since 1973, which today leads the Group’s asset management operations. The London branch has historically been dedicated to the institutional management operations of Lombard, Odier & Cie, and therefore had the corporate name Lombard, Odier International Portfolio Management Ltd (LOIPM).
The firm has managed portfolios of institutional investors in the US and the Middle East, among others. Still, under British jurisdiction, the group has also had a presence in Gibraltar since 1987. On this day, Lombard, Odier & Cie acquired Gibraltar Private Bank.
In France, Lombard Odier has been based in Paris since 2001 with the opening of the Lombard Odier Gestion, which became LODH Gestion the following year when Lombard, Odier & Cie merged with Darier, Hentsch & Cie.
The purpose of the branch was to expand the customer base in France and further distribute investment funds under the Lombard Odier brand. In 2004, the French branch received a mandate to manage the Pension Reserve Fund (FRR), and then, in partnership with ADI, opened the hedge fund firm GéA in France.
The partnership ended in October 2008 and Lombard Odier opened its own office specializing in hedge funds, complementing its dedicated offices for bondholder investment, asset allocation and socially responsible investing.
Lombard Odier Group has been present in Brussels since 2004, in Madrid and Frankfurt since 2007, in Moscow since 2008 and in Milan since 2016. Lombard Odier Group also owned a subsidiary in the Netherlands, which was taken over by KBL Group in 2018.
Americas
Lombard Odier Group has been present in North America since 1951 when Lombard, Odier & Cie opened its first international company overseas in Montreal, Canada. This subsidiary, originally established as Secfin Company Ltd, is now Lombard Odier Securities (Canada) Inc…
The group has been present in the US since 1972 when Lombard, Odier & Cie opened a subsidiary called Lombard, Odier Inc., which has now become Lombard Odier Asset Management (USA) Corp. Once launched, Lombard’s sole purpose, Odier Inc. was supposed to transmit information from the American side to Geneva, but quickly expanded, gaining seats on the Boston (1969) and New York Stock Exchanges (1979).
Lombard Odier Group has also been present in Bermuda since 1972 and in Nassau since 1979.
In Latin America, the Group has been present in Panama City since 2013 and in Montevideo since 2017.
Asia, Middle East, and Africa
In Asia, Lombard Odier has been operating in Hong Kong since 1987, in Tokyo since 1992 and in Singapore since 2017. Since 2014, the Group has also entered into a cooperation agreement with Industrial Bank in China.
Finally, the Group has had offices in Dubai (United Arab Emirates) since 2006 and in Tel Aviv (Israel) and Johannesburg (South Africa) since 2017.
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