BBVA will reduce the entry into risk capital in its private banking business to €50,000.
BBVA wants a share of the profitable business. As it turns its focus to private banking in 2021 to relaunch, it has redesigned and strengthened the division with new teams and is now focused on expanding its portfolio of products and services. In the field of machinery, he is working to expand the catalog of alternatives and reduce the entry limit of his clients into venture capital investments from 100,000 to 50,000 euros. Their intention is to prepare a proposal in the fall with the expectation that the illiquid program will end next year.
A legislative change by the government allows the threshold for access to risk capital to be lowered from 100,000 to 10,000 euros from 2022, in order to even bring it closer to small investors. However, most companies prefer to leave this type of asset reserved for large investors due to their level of complexity and, above all, because selling vehicles takes years when betting on companies that are not listed on the stock market.
This also applies to BBVA though will lower the threshold at least half for allow your private banking clients to diversify into different products and that they can also always choose assets with better development expectations, without tying 100,000 euros to one car.
Your offer in alternative markets This was many years ago and he lives in them. 500 million euros of customer investment. It currently has six products of pure venture capital, private debt and multi-strategy, the latter modality which in turn includes four types: venture capital, private debt, infrastructure and real estate. Are bank built carsusing the formula of means of means, and now your intention include third party products.
Introduces an explicit fee for investors starting from 2 million
A bet that directly matches your strategy to delve into independent consultations, which also plans to promote a fee-for-service model. Currently, this division allows the client to delegate investment decisions to his banker (discretionary management) or decide in which specific assets to invest, on his advice. Under this latter formula, he maintains an independent advisory service, with or without explicit payment for it, with collection through retrocession (commissions from a fund that is retained by the distributor or consultant).
However Consultations with explicit fees are currently limited to the estates from 5 million euros. Among the initiatives being prepared, the system is being finalized extend double pricing to assets over 2 million and that they can choose to provide explicit fee or no explicit fee consultation, as well as the option of contracting for discretionary management services.
The Mifid II regulation paved the way for explicit fees for advice as it implies full transparency for the client (they always know about it and only pay for the advice received), but its implementation may become mandatory with future strategic investment banking (RIS) regulations. which is still under development in Europe.
At the end of 2023 the division BBVA Private Banking had 118.515 million euro to assets under management, An amount exceeding the previous year’s volume by 17% and the 2021 figure by 52.76%, when the decision was made to restart the division. this volume 9 out of every 10 euros are in third party funds for the initial decision to maintain full independence for the Wealth Clients division in selecting the products and vehicles included in their investment portfolios.
Alliance with Morgan Stanley
And the latest move is an alliance with Morgan Stanley Investment Management, announced last month, to offer clients with €2 million in assets and a newer corporate fixed income portfolio advised by prestigious manager Richard Ford and its equipment.
The reshuffling of the division also entailed a redefinition of its structure. In 2021, it was determined that private banking will serve clients from €500,000, with a special asset unit for family groups or clients from €2 million and independent advice for states over 5 million from the Open Governance Department.
It currently has almost 115,000 clients in private banking, 7,500 in wealth and 100 peer reviewed Open Management groups. To go even further in complicating the offering for the super-wealthy, it has also created a division of bankers with wealth ranging from eight to 10 million in assets. For managed portfolios, a minimum investment of €200,000 is required and €500,000 for recommended ones.
707 bankers and almost 115,000 large fortunes
The device has 707 bankers and at the end of last year They served 114,704 clients.With. It is one of the private banks with the largest number of managers in Spain and last year it was strengthened by 20 bankers with the creation block for the super rich or super highcreated specifically to suit conditions more than 8-10 million Euro.
Each of these latter professionals manages an average of 15 assets or family groups, while the remaining bankers personally manage an average of 25 to 35.
One of the first measures the bank took in relaunching the division was to monitor its personal banking client portfolio, which currently numbers approximately 1.1 million clients whose needs are more tailored to private banking. The algorithm and conducted research allowed register 43,500 private banking clients between 2021 and 2022, as a result, your productivity with the bank has tripled.