Leonteq Securities earmarked for IPO during the fourth quarter
EFG Financial Products announces that its parent company EFG International intends to proceed with the contemplated IPO of EFG Financial Products Holding AG in the fourth quarter of this year, subject to market conditions.
EFG International intends to proceed with the initial public offering of EFG Financial Products Holding AG, its Zurich-based integrated structured investment service provider, on the SIX Swiss Exchange in the fourth quarter of 2012, subject to market conditions. This is in keeping with EFG International’s business review, announced in October 2011, which sought to refocus the business on private banking and earmarked EFG Financial Products for an IPO. It also refl ects the progress made by EFG Financial Products in recent years; its future growth potential; and the belief that it can benefi t from a more independent positioning:
- With its focus on structured investment products (defi ned as structured products excluding so-called vanilla or fl ow products), EFG Financial Products has made signifi cant progress since its inception in November 2007, establishing itself as a leading provider in Switzerland. As of mid-2012, EFG Financial Products was the second largest issuer of exchange-listed structured investment products in Switzerland (market share of 21%), and a market leader in certain specifi c product categories, notably collateralized structured products, commodity-related exchange-listed structured investment products and yield-enhancement exchange-listed structured products1 . In addition to Zurich and Geneva, EFG Financial Products has also established an international presence with offi ces across Europe (Frankfurt, Paris, Madrid, London, Monaco and Guernsey) and Asia (Hong Kong and Singapore). The business currently has over 270 employees worldwide.
- EFG Financial Products benefi ts from experienced leadership, combined with a high quality team of professionals, drawn from leading global organisations. All are strongly committed to the business and will agree to long-term lock-up agreements.
- The business enjoys competitive differentiation courtesy of a client offering based on: transparency, security and liquidity; a modern, scalable and integrated structured investment service platform; and a broad product offering across multiple asset classes and risk-return profi les. The business has received multiple industry awards recognising its innovation, service quality and product range.
- EFG Financial Products has proven its ability to grow and deliver performance during a challenging phase in the economic cycle. As announced in EFG International’s half-year results, EFG Financial Products delivered a net profi t of CHF 10.4 million for the fi rst half of 2012, up from CHF 4.1 million in the fi rst half of 2011. From 2009 to 2011, EFG Financial Products achieved 26% compound annual growth in operating income.
- EFG Financial Products plans to generate further growth based on various initiatives, such as selective international expansion, as well as broadening and deepening its product range. It is also pursuing an innovative white-labelling strategy, whereby partner banks are able to provide structured investment products to their clients drawing on the expertise and support of EFG Financial Products. The business currently has two white-labelling partners in Switzerland, and sees signifi cant scope for further expansion, with this line of business standing to benefi t from a more independent set-up.
The board of directors of EFG Financial Products has been enhanced to refl ect its future direction. It now includes the following independent members:
- Peter Forstmoser (attorney-at-law and former chairman of Swiss Re), chairman of the board and of the remuneration committee.
- Jörg Behrens (former partner and global head of Risk Analytics at Ernst & Young), chairman of the risk committee.
- Hans Isler (former partner of Ernst & Young SA, Switzerland), chairman of the audit committee.
- Vince Chandler (former COO of Credit Suisse Technology and former head of Technology for a number of businesses within Citigroup‘s EMEA Corporate and Investment Bank).
EFG International is represented on the board by: John Williamson (CEO); Giorgio Pradelli (CFO); Patrick de Figueiredo (Chief Risk Offi cer of EFG Group); Frederick Link (Chief Risk Offi cer); and Lukas Rufl in (Deputy CEO and designated representative of the founding partners of EFG Financial Products).
The executive committee of EFG Financial Products comprises: Jan Schoch, CEO and founding partner; Michael Hartweg, Deputy CEO, CFO and founding partner; Sandro Dorigo, head Pension Solutions & Regions and founding partner; Ulrich Sauter, head Risk, Legal & Compliance; Michael Hoelzle, COO.
EFG Financial Products is currently preparing a prospectus which will be available at the launch of the public offering. Upon completion of the planned IPO, EFG International will reduce its stake in EFG Financial Products from 57% to not less than 20%, thereby strengthening its core tier 1 capital as well as sharpening its focus on private banking. EFG International will continue to fully consolidate EFG Financial Products for accounting, regulatory supervision and regulatory capital purposes; and it has agreed to support the evolution of EFG Financial Products towards a stand-alone business for a transitional period following the IPO. The planned IPO is also expected to raise fresh capital for EFG Financial Products.
EFG International will continue to provide guarantees for certain new products (although the share of these products is expected to reduce over time as a result of white-labelling cooperation with further partner banks), and existing guarantees on outstanding products will remain in place. EFG International will also continue to make the services of EFG Financial Products available to its clients as part of its open architecture approach.
Credit Suisse is acting as global coordinator and bookrunner for the planned IPO. Bank Vontobel AG and Crédit Agricole CIB are acting as co-lead managers. Rothschild is acting as independent fi nancial advisor to EFG International and EFG Financial Products.