Vontobel Holding AG · SIX:VONN
Vontobel — Investor Day (November 2022)
88 slides from Vontobel's investor day presentation, Nov 10, 2022
Slide 1: Investor Day 2022
Investor Day 2022 November 10, 2022
Slide 2: Cautionary statement regarding forward-looking statements and disclaimer
Cautionary statement regarding forward-looking statements and disclaimer This document may contain projections or other forward-looking statements related to Vontobel that are subject to known and unknown risks, uncertainties, and other important factors. These projections and forward-looking statem
Slide 3: Agenda
Agenda 13:30 – 14:20 Welcome, Strategy update & financials Zeno Staub, Thomas Heinzl 14:20 – 14:30 Q&A 14:30 – 14:50 Strategic priority #1: Delivering future-proof investment solutions Christel Rendu de Lint 14:50 – 15:00 Q&A 15:00 – 15:20 Strategic Priority #2: Delivering best-in-class private clie
Slide 4: Today's speakers
Today’s speakers Zeno Staub Thomas Heinzl Christel Rendu de Lint Marko Röder CEO CFO/CRO Deputy Head Investments Head Asset Management Head Investments Head Finance & Risk Georg Schubiger Felix Lenhard Caroline Knöri Head Wealth Management COO Head Human Resources Head Technology & Services 4
Slide 5: Welcome, strategy update and financials
Welcome, strategy update and financials Zeno Staub CEO Thomas Heinzl CFO
Slide 6: Strategy update
Strategy update Zeno Staub, CEO
Slide 7: Vontobel – empowering investors to build better futures
Vontobel – empowering investors to build better futures Empowering investors We empower private clients, institutional investors and financial market intermediaries to achieve their objectives. Pure-play buy-side investment firm 201 B We take the client’s perspective, master what we do, and only do
Slide 8: Strong track record of value creation and successfully navigating difficult markets
Strong track record of value creation and successfully navigating difficult markets Over two decades of unbroken profitability, through-the-cycle growth and attractive shareholder returns 244 Key drivers 220 199 201 − Strict focus on investments +8% CAGR 165 171 − Long-term orientation 136 139 − Con
Slide 9: Introducing the next two-year strategic sprint towards our 2030 Lighthouse vision
Introducing the next two-year strategic sprint towards our 2030 Lighthouse vision Cycle 2 Cycle 3 Cycle 4 Cycle 5 2021 2023 2025 2027 2029 2020 2022 2024 2026 2028 2030 2030 Lighthouse Our long-term vision “By 2030, Vontobel will be known as one of the leading and most trusted “ global investment fi
Slide 10: We have executed on the Strategic Priorities we set out for our first two-year sprint
We have executed on the Strategic Priorities we set out for our first two-year sprint Strategic Priorities 2020 – 2022 What we achieved Sample proof points − One of the strongest brands in Switzerland Swiss financial Deliver the Vontobel experience − Net Promoter Scores exceeding even our own ambiti
Slide 11: 2022 has seen unprecedented market declines
2022 has seen unprecedented market declines US Equity US Fixed income Long-running trends S&P 500, % per annum 10Y treasuries, % per annum may have changed across multiple dimensions 60% 50% 50% 40% Rapidly rising inflation 40% 30% 30% 20% Sharp central bank policy shifts 20% 10% 10% Geopolitical te
Slide 12: We serve clients in markets representing >80% of global wealth
We serve clients in markets which combined represent >80% of global wealth, the highest absolute wealth accretion, and which are most likely to remain accessible Vontobel AuM by client domicile Q3 2022, CHF 201.2 B Other Switzerland Access to ~90% of estimated 12% LATAM and MEA global wealth2 7% Foc
Slide 13: Our new priorities will also capitalize on key industry trends and market shifts
Our new priorities will also capitalize on key industry trends and market shifts Higher rates and inflation Private markets represent a large and Growing client expectations on digital Central bank main policy rate, % growing asset class and hybrid capabilities Global alternatives AuM, USD T Global
Slide 14: Strategic Priorities 2023 – 2024
Strategic Priorities 2023 – 2024 1 Delivering future proof investment solutions 2 Delivering best-in- class private client experiences 3 Accelerating our US growth 4 Scaling value creation New regimes Personalization at scale Strong regional hub Capital efficiency Review, diversify and enhance Devel
Slide 15: Our Strategic Priorities support our through-the-cycle financial targets
Our Strategic Priorities support our through-the-cycle financial targets We reaffirm our through-the-cycle financial targets Growth Profitability Capital and payout Operating income 4-6% Cost/income ratio <72% CET1 ratio >12% Net new money 4-6% Return on equity >14% Total capital ratio >16% Payout r
Slide 16: We are well-positioned to continue to generate long-term shareholder value
We are well-positioned to continue to generate long-term shareholder value Long-term oriented Supported by majority family shareholder Strict focus Buy-side, client-centric investment firm targeting a focused set of developed markets Clear avenues for growth Organic and inorganic Long-term Conservat
Slide 17: Financials
Financials Thomas Heinzl, CFO
Slide 18: 2022 has seen unprecedented market declines (recap)
2022 has seen unprecedented market declines (recap) US Equity US Fixed income Long-running trends S&P 500, % per annum 10Y treasuries, % per annum may have changed across multiple dimensions 60% 50% 50% 40% 40% Rapidly rising inflation 30% 30% 20% 20% 10% 10% Sharp central bank policy shifts 0% 0% -
Slide 19: Trading Update 9M 2022
Trading Update 9M 2022 CHF B 3Q 2022 1H 2022 2021 Trading update 9M 2022 Assets under management 201.2 208.6 243.7 − Updated quarterly reporting framework Asset Management 107.8 118.3 142.9 − Trends observed in the H1 2022 continued Wealth Management 89.0 85.7 95.8 − Year to date AuM change strongly
Slide 20: Translating our strategy (the "how")
Translating our strategy (the “how”) Long term orientated management to enable future Optimize growth business Outstanding portfolio for people quality value creation Long-term value creation (incl M&A) Strategic financial through a capital light management business model with a conservative risk pr
Slide 21: Starting point: diversified business mix and high share of recurring revenues
Starting point: diversified business mix, high share of recurring revenues and demonstrated capability to grow in developed markets AuM by client domicile AuM by mandate type WM cumulative NNM by domicile Q3 2022, % of total AuM Q3 2022, % of total AuM H1 2021 – 9M 2022, CHF 9.5 B Other Custody2 Fun
Slide 22: Conservative risk profile and continued RWA reduction
Conservative risk profile and continued RWA reduction Risk-weighted assets Credit RWA CHF M CHF M − Vontobel is not engaged in corporate banking/corporate lending (no “classic -14% -34% bank” profile) 7,448 3,334 − Reorganization in 2020 towards an even 6,617 more capital light business model 6,415
Slide 23: First measures of cost containment in place since Q1 2021
First measures of cost containment in place since Q1 2021 Total operating expense half and full year Cost containment measures put in place in Q1 2022 CHF M − Reduction of variable compensation − Freeze of headcount growth 1,068 1,000 – 1,030 − Focusing of IT budget and spend H2 522 Personnel expens
Slide 24: Further cost initiatives in progress for 2023
Further cost initiatives in progress for 2023 Total operating expense half and full year Cost containment measures put in place in Q1 2022 CHF M − Additional cost containment measures developed in Q3 2022, 1,068 1,000 – 1,030 implementation started in October − Measures comprise ~ 65 M 1. “Standard
Slide 25: Continued focus on pricing discipline
Continued focus on pricing discipline Wealth Management margins Monthly net interest income bps CHF M 75 70 66 7.3 5.9 5.9 Ø H1 2022 5.6 1H21 2H21 1H22 Ø Ø Ø Jan Feb Mar Apr May Jun Jul Aug Sep Asset Management margins 2019 2020 2021 2022 bps 42 42 38 − Continued focus on pricing discipline in WM an
Slide 26: Vontobel
Vontobel
Slide 27: Strategic Priority 1: Delivering future-proof investment solutions
Strategic Priority 1 Delivering future-proof investment solutions Christel Rendu de Lint Deputy Head of Investments
Slide 28: We are active managers with boutiques spanning asset classes
We are active managers with 6 boutiques spanning asset classes Sustainable Vescore Equities We offer our expertise to all our clients − The quality of the investment output should not depend on the clients’ Global reach with onshore presence in Europe, Quality wallet size US and Asia Multi Asset Gro
Slide 29: We manage a diversified range of strategies
We manage a diversified range of strategies Boutiques Strategies Sustainable Deep focus on specific investment Emerging markets equities: mtx Impact equities Equities niches, factoring in sustainability and Equity ESG consideration Swiss equities Thematic equities Global equities US equities Quality
Slide 30: We have a long-term track record of growing with our clients
We have a long-term track record of growing with our clients CHF 123 B AuM managed by Investment teams1 Sustainable Quality TwentyFour Vescore Multi Asset Fixed Income Equities Growth AM +14% +7% +8% 26 23 +8% 20 21 +10% +7% 19 14 11 8 82 8 8 4 2009 9M22 2009 9M22 2009 9M22 2009 9M22 2009 9M22 2015
Slide 31: We will focus on 3 axes to deliver future-proof investment solutions
We will focus on 3 axes to “Deliver future-proof investment solutions” New regimes 1 Delivering outperformance and offering active solutions in the context of new regimes Private markets 2 Bringing Private Markets to our clients through partnership(s) Transition to sustainability 3 Building ESG solu
Slide 32: 2022 has faced extraordinary starting macroeconomic conditions
2022 has faced extraordinary starting macroeconomic conditions… Decade low interest rates Decade high central bank balance sheets Decade high inflation US 10-year interest rate US FED balance sheet US Consumer price headline index % USD T % YoY 7 9 8 8 6 6 7 5 6 4 4 5 2 3 4 3 0 2 2 1 -2 1 0 0 -4 00
Slide 33: Three consecutive quarters of outsized corrections across asset classes
… leading to 3 consecutive quarters of outsized corrections across asset classes Fixed Income performance1 Equity performance1 20% 15% Band of 80% 10% central quarterly performances in 5% the last 20 years 0% Q1 2022 -5% Q2 2022 -10% Q3 2022 -15% -20% Global US Global Global high MSCI MSCI MSCI MSCI
Slide 34: Impacting investment managers including Vontobel
…impacting investment managers including Vontobel Morningstar ranking based on an 1-year performance All Vontobel funds Equity funds Fixed Income funds Multi Asset funds Equity: strong ranking as our Performance of Multi demonstrated abilities to pick Captures Asset mandates1 quality stocks come bac
Slide 35: Our 5-year performance rankings are healthy
Our 5-year performance rankings are healthy Morningstar ranking based on a 5-year performance All Vontobel funds Equity funds Fixed Income funds Multi Asset funds Performance of Multi Asset mandates1 Captures CHF ~1 B of assets Captures CHF ~10 B of assets 13% 29% 29% 41% 5% 58% 84% 84% 48% 42% 67%
Slide 36: Thinking about potential secular shifts
Thinking about potential secular shifts High inflation Emergence of for longer geopolitical blocks Income Geographical choices choices 36
Slide 37: Our fixed income strategies are active in the high income space
Our fixed income strategies are specifically active in the high income space Percentage of our Fixed Income assets by levels of yields Yield in USD terms1 CHF 25 B 69% CHF 20 B − 90% of our fixed income assets have a yield above 7% CHF 15 B − By comparison, the Global Aggregate Benchmark yield is 3.
Slide 38: We manage a full suite of strategies with different geographical focus
We manage a full suite of strategies with different geographical focus 42% Global strategies 58% Regional strategies 25% AuM Developed Markets strategies 16% AuM Emerging Markets strategies 11% AuM Swiss strategies 5% AuM US strategies Asset Management assets under management as of 30.09.22 38
Slide 39: We are actively seeking to expand our offering to Private Markets
We are actively seeking to expand our offering to Private Markets Our three-pronged approach to addressing the opportunity In 2023 we will cement Private Markets as a building block of our private clients portfolios through a partnership with an international institutional player We will further loo
Slide 40: We have four overarching ESG investment principles
We have four overarching ESG investment principles Our four ESG investment principles across our 6 boutiques We incorporate Environmental, Social and Governance 1 (“ESG”) considerations into our investment processes, with the belief that over time it will enable our clients to better achieve their i
Slide 41: We have a dedicated Impact and Transition range
We have a dedicated Impact and Transition range Vontobel Fund II – Global Clean Tech Global Active Impact Impact calculator Set of nine Impact member UN PRI Equities Vontobel environmental strategy at GIIN2 Vontobel Fund signatory Potential launched became impact launched 2020 – Clean 2010 Avoided 2
Slide 42: Vontobel
Vontobel
Slide 43: Strategic Priority 2: Delivering best-in-class private client experiences
Strategic Priority 2 Delivering best-in-class private client experiences Georg Schubiger Head Wealth Management
Slide 44: Our private client business at a glance
Our private client business at a glance We serve our clients through two Client Units, each catering for distinct client profiles, leveraging synergies of skills and technology Wealth Management Digital Investing 94 B Mainly serving UHNW and HNW Mainly serving self-directed and CHF Assets under Mana
Slide 45: We have delivered resilient growth in assets and revenues
We have delivered resilient growth in assets and revenues Wealth Management Digital Investing NNM and AuM Operating income Operating income CHF B CHF M CHF M 0.3 0.3 0.6 4.3 3.1 2.5 3.0 0.9 166 323 320 310 150 92.2 95.8 81.6 85.7 89.0 279 279 276 274 121 72.5 75.3 71.8 89 94 86 75 1H19 2H19 1H20 2H2
Slide 46: High and increasing client satisfaction
High and increasing client satisfaction Wealth Management Net Promoter Score Client satisfaction “Based on your experience with Vontobel, how likely “Considering all your experiences with Vontobel as a client, are you to recommend us to a friend or an acquaintance?” how satisfied are you with us?” N
Slide 47: A key differentiator: institutional caliber expertise from our Investment Boutiques
A key differentiator: providing our clients with institutional caliber expertise from our Investment Boutiques Our private clients access an investment-led modular offering ... ... with our Boutiques at the core Vontobel Managed Solutions Managed Solutions Vontobel Investment Boutiques Clients deleg
Slide 48: Leading with investments has also enabled success with UHNW clients
Leading with investments has also enabled success with UHNW clients Wealth Management Pillars of our UHNW (Key client) strategy Solid progress 2020 to 2022 and further potential Solid NNM and revenue growth, with Key Clients representing 23% of AuM as of Q3 2022 Focus on the liquid share of client w
Slide 49: Delivering best-in-class private client experiences in a strict set of markets
We aim to continue our success in 2023 – 2024 by delivering best-in class private client experiences in a strict set of markets Personalization On-demand Strict 1 2 3 at scale service models market focus Objective Enable every client to achieve her Enable every client to seamlessly Focus our efforts
Slide 50: Showcase iPortfolio – enhancing mass-customization capabilities
Showcase “iPortfolio” – enhancing our mass-customization capabilites iPortfolio Client portfolio management engine enabling fully customized investment solutions at scale − Efficient implementation of tailored discretionary portfolios for our UHNW and HNW clients − Very broad range of parameterizati
Slide 51: Showcase volt by Vontobel
Showcase “volt by Vontobel” – strengthening both our mass-customization and on-demand service capabilities volt by Vontobel “300 investment experts in one app” − Investment application for affluent clients utilizing our central investment engine (MARS) − Investments and retirement capital are active
Slide 52: Showcase new Markets platform
Showcase “new Markets platform” – improving our digital client journeys based on an on-demand service model New derinet Markets platform New derinet Markets platform providing products, information and investment tools for self-directed investors − Beyond product information with educational content
Slide 53: Delivering private client experiences in a strict set of focus markets
We will focus on a delivering best-in-class private client experiences in a strict set of focus markets By client AuM CHF B NNM CHF B NNM growth1 domicile 9M 2022 2021 – 9M 2022 2021 – 9M 2022 Estimate Estimate Estimate Demonstrated capability to grow Switzerland in developed markets Germany Italy 6
Slide 54: Vontobel
Vontobel
Slide 55: Strategic Priority 3: Accelerating our US growth
Strategic Priority 3 Accelerating our US growth Georg Schubiger Head Wealth Management Marko Röder Head Asset Management
Slide 56: Our US business at a glance
Our US business at a glance Vontobel provides US institutional investors, HNW and UHNW individuals access to Vontobel’s leading investment expertise and Boutiques. We serve our clients through two Client Units: Asset Management Wealth Management1 20 B SEC registered investment Leading Swiss-based CH
Slide 57: North America represents a significant market opportunity
North America represents a significant market opportunity Institutional market Intermediary market UHNWI and HNWI investable wealth % of global total % of global total % of global total1 North North America America 38% 48% North USD 57 T USD 71 T 48% America USD 76 T 62% Other regions 52% Other 62%
Slide 58: Building on a multi-decade presence as we accelerate our US growth
We are building on a multi-decade presence as we accelerate our US growth 1984 – 2022 2023 – 2024 38 years of increasing presence Accelerating our US growth 2022 Acquisition of UBS Swiss Financial Advisers 2022 Introduction of Multi Asset & Sustainable Equities Boutiques Establish a strong regional
Slide 59: Clear market leader serving US wealth management clients seeking international diversification
We are the clear market leader in serving US wealth management clients seeking international diversification Wealth Management We serve UHNWI and HNWI US investors Vontobel is the clear market leader AuM for Swiss-based RIAs1,2 Ultra high net High net worth Vontobel3 CHF 10 B worth individuals indiv
Slide 60: Compelling value proposition for US investors: diversification
As a client-centric and investment-led wealth adviser, we reflect this client-need and offer a compelling value proposition for US investors Wealth Management Ultra high net High net worth Diversification in Direct investments into underlying assets worth individuals individuals international market
Slide 61: Wealth Management clients have access to module-based investment solutions
Wealth Management clients have access to module-based investment solutions, addressing individual client preferences Wealth Management We offer both discretionary and advisory programs… Discretionary Solutions Advisory Solutions Module-based approach allowing clients to compose their Active investme
Slide 62: Expanding through direct client acquisition, UBS partnership and product offering
We will expand through direct client acquisition, the UBS partnership and by expanding our product offering Wealth Management Direct client acquisition Acquisition via partnership Direct with UBS − Extensive collaboration with multipliers and − Exclusive partnership with UBS WM Americas UBS partners
Slide 63: Institutional caliber investment services to US institutions and intermediaries
We provide institutional caliber investment services to US institutions, consultants and intermediaries Asset Management The client and consultant relations that are core to our strategy Increasingly diverse AuM due to US market boutique launches AuM by boutique, Americas sales view, Q3 2022 Consult
Slide 64: Vontobel Asset Management in the US – Channels
Vontobel Asset Management in the US – Channels Asset Management US US US Offshore LatAm Canada Institutional Intermediary Intermediary Institutional Institutional Multi-boutique strategy Multi-boutique strategy Multi-boutique strategy Multi-boutique strategy Multi-boutique strategy initiated in 2018
Slide 65: Growing the US institutional segment
We will grow the US institutional segment by broadening our business and becoming the manager of choice Wealth Management Coverage model: client centric with dedicated coverage per territory Broadening our business with new channels & wrappers Direct − Expand scalable global Vontobel UBS partnership
Slide 66: Growing the US intermediary segment by scaling our partnership model
We will grow the US intermediary segment by scaling our partnership model Wealth Management Coverage model: boutique centric with client solutions Broadening our business with new channels & wrappers Direct − Expand scalable global Vontobel Quality Growth products UBS partnership − Expand distributi
Slide 67: We will deepen our relationships with Global Banks
We will deepen our relationships with Global Banks Wealth Management Priority Institution Wealth Global Americas C-Suite Recommended Direct assets Coverage Coverage Dialogue Funds 1 US Bank UBS partnership Asset Management 2 US Bank 3 Swiss Bank US Institutional Combined 4 US Bank US > USD 12 T Inte
Slide 68: Key success factors for accelerating our US growth
Key success factors for accelerating our US growth Expand Vontobel as a best in class multi- Finalize the integration of Vontobel SFA boutique investment firm in the US Offer top differentiated strategies with style Roll out a unified expanded offering with full consistent investment performance and
Slide 69: Vontobel
Vontobel
Slide 70: Strategic Priority 4: Scaling value creation
Strategic Priority 4 Scaling value creation Thomas Heinzl CFO Felix Lenhard COO, Head Technology & Services Caroline Knöri Head Human Resources
Slide 71: Capital management
Capital management Thomas Heinzl, CFO
Slide 72: Translating our strategy (the "how")
Translating our strategy (the “how”) Long term orientated management to enable future Optimize growth business Outstanding portfolio for people quality value creation Long-term value creation (incl M&A) Strategic financial management through a capital light business model with conservative risk prof
Slide 73: Strong value creation for shareholders over last 10 years
Strong value creation for shareholders over last 10 years 18.8% − Step by step move towards capital accretive business model since 14.2% 14.6% 13.3% 2011 13.1% 13.0% 12.4% 11.0% 11.7% − Capital accretive business model 10.6% drove attractive shareholder Cost of 9.7% 9.2% 8.7% 8.8% 9.1% ~9% equity1 8
Slide 74: Continued focus on value creation (capital perspective)
Continued focus on value creation (capital perspective) 1 Strengthened capital ratios − Continue to maintain strong capital position with CET1 ratio in excess of AT1 ~6.8% 12% and a total capital ratio in excess of 16% CET1 25.5% 21.3% 17.9% 19.0% 18.4% 16.6% 18.5% 12.3% 13.5% 13.8% ~16.2% − Shareho
Slide 75: Maintain a strong capital position
1 Maintain a strong capital position Reduced RWA density1 % Efficient use of capital as a resource -19% 24.0% 23.4% − Inclusion of capital charges in all strategic decisions 22.2% (e.g., product launches, lending approval, pricing, 20.7% 19.5% capital budgeting and investment case monitoring) − Oper
Slide 76: M&A as value enhancing booster of organic growth
3 M&A as value enhancing booster of organic growth Strong track record of inorganic growth through Capacity and capability for disciplined acquisitions “bolt-on” acquisitions Strong capital position Finter Bank Demonstrated execution and integration capability CHF 1.6 B ACA1 Notenstein TwentyFour AM
Slide 77: Operational excellence
Operational excellence Felix Lenhard, COO, Head Technology & Services
Slide 78: Operational excellence in the light of the on-going digital transformation
Operational excellence in the light of the on-going digital transformation Stable and High resilience Maximum End-to-end Agile reliable IT synergies flows development platforms cycles High availability Scalability Shared platforms Multi-channel Short time to client journeys market No location or Fle
Slide 79: We partner with best-in-class platform or service providers
We partner with best-in-class platform or service providers to scale operational excellence Our key architectural components Sourcing options Three spotlights for today 1 One global investment platform1 Product / Making our global multi boutique services Software approach possible Sales platform Int
Slide 80: One investment platform in partnership with State Street
The comprehensive implementation of one investment platform in partnership 1 with State Street is a strategic enabler for our US expansion Comprehensive implementation of a “state of the art” solution Scalable strategic enabler Enables US access to our full Full service middle office outsourcing mul
Slide 81: Enhancing the Vontobel data & analytics platform
We will further enhance the Vontobel data & analytics platform, advancing the 2 goal we set out already in 2020 to transform Vontobel into a data-driven firm Strategic goals Solution Clear use cases Transform Vontobel into a data-driven firm We have implemented one single cloud- based data and analy
Slide 82: Modern working, communication & collaboration in partnership with Microsoft
Expanding a robust foundation for modern working, communication & 3 collaboration in partnership with Microsoft − We are meeting the increasing need for digital communication and collaboration, enabling the work-place of the future − Deployed the highly scalable Microsoft 365 cloud-based platform in
Slide 83: Talent Development
Talent Development Caroline Knöri, Head Human Resources
Slide 84: Executed on objective to make Vontobel a great place to work
As outlined with our Strategic Priorities 2020-2022 we have executed on our objective to make Vontobel a great place to work with a strong performance culture We reward performance We make everyone an architect and provide an attractive workplace of our ambition, alongside our values Recognition Val
Slide 85: Tangible results over the last two years and building on them in 2023 – 2024
We have achieved tangible results over the last two years and will further build on these during our next strategic sprint 2023 – 2024 We will build on this success in 2023 – 2024, Tangible results 2020 – 2022 supporting the execution of our overall strategy A global leading investment firm Increasi
Slide 86: Vontobel
Vontobel
Slide 87: Wrap-up
Wrap-up Zeno Staub CEO
Slide 88: Key messages
Investor Day 2022 Key messages Strategic Priorities 2023 – 2024 We have a long track-record of value creation with attractive shareholder returns 1 Delivering future proof investment solutions Our 2023 – 2024 Strategic Priorities will take us one step closer towards our 2030 ambition 2 Delivering be