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Bank Julius Baer CEO Dies Unexpectedly

Date: Tuesday, December 9, 2008
Author: Reuters

Alex Widmer, the chief executive of Bank Julius Baer and a well respected figure in Swiss private banking, has died unexpectedly at the age of 52, the bank said.

A source told Reuters he had been informed by close friends of Mr. Widmer's family that the banker had committed suicide.

Swiss news website 20Minuten cited two unnamed independent sources as saying it was a case of suicide.

Swiss police declined to comment on the death.

Julius Baer, Switzerland's biggest dedicated wealth manager which has roots dating back to the 19th century, is based in Zürich and manages more than 360 billion Swiss francs ($300.8 billion) in assets for rich individuals and institutions.

A spokesman said there was no link between Mr. Widmer's death and the group's current activities, but declined to give further details on the cause of Mr. Widmer's death overnight on Wednesday [Dec. 3], saying it was a private matter.

The Swiss news agency SDA said Mr. Widmer's wife died from cancer in 2005.

A Zürich-based trader said employees at the bank had been told Mr. Widmer had died from an unspecified illness. Mr. Widmer, a Swiss citizen, had three children.

"Alex Widmer was the very epitome of a Swiss private banker," Julius Baer said in a statement.

"It is a great shame," added a Zürich-based trader. "It is very sad. He embodied Julius Baer. He was the most important person in private banking."

By 1411 GMT, shares in Julius Baer were down 9.4% at 33.54 Swiss francs, while the DJ Stoxx European banking sector index was down 2.9%.

Mr. Widmer will be succeeded by Hans de Gier, who served as CEO of Julius Baer Group until September 2008 when he stepped down to focus on his role as chairman of hedge fund unit GAM.

"This is a setback for the bank. Widmer is widely regarded as the architect of its new direction," Claude Zehnder, a ZKB trading analyst said. "However, with De Gier they have someone very experienced in place who knows the bank inside out."

Hedge Fund Weighs

Shares in Julius Baer have lost some 60% in 2008 as markets have worried about outflows at its hedge fund GAM, which accelerated in October Previous Reuters Story.

Julius Baer has rejected speculation that it would shed GAM as it restructured its business to focus on wealth management, which has benefited from problems at rival Swiss bank UBS. That bank also has seen strong outflows of money to clients scared by its heavy write-downs.

Julius Baer said in July that it no longer needed a group CEO after restructuring measures meant that Bank Julius Baer, GAM and U.S. asset management unit Artio Global would each operate as independently managed companies. Bank Julius Baer accounts for over 60 percent of group assets under management.

A GAM spokesman said Mr. De Gier will remain as GAM chairman in addition to taking on the Bank Julius Baer CEO role.

One trader said Mr. Widmer's death could lead to "massive uncertainty among investors as a vacuum on the executive level happens in the worst possible time," adding that takeover rumors could resurface in the future.

But Vontobel analyst Panagiotis Spiliopoulos said appointing Mr. De Gier as chief executive was the best short-term solution. "Julius Baer won't want to be put under pressure to name a successor. The successor is likely to be a Swiss banker," he said. "Private banking is still a core Swiss business. Traditionally wealth management is run by Swiss people. Widmer made Julius Baer one of the premier addresses for private banking both in Switzerland and abroad. He also spearheaded expansion into Asia."

In November the bank said net operating income to the end of October was down 10% from the previous year as assets under management were hit by falling markets, though private banking net inflows had risen significantly in the year to date.

In an interview with Bloomberg conducted the day before his death, Mr. Widmer said: "Even if global wealth creation is getting slower, we should do better than the rest."

Charismatic Leader

Commenting on Mr. Widmer's death, Chairman Raymond Baer said in a statement: "We have lost a dear friend, a good colleague and a charismatic leader. Alex very successfully opened up new dimensions for the Private Banking business of Julius Baer. His enormous commitment, his active relationship and close involvement with the clients and his passion for banking will forever serve as a model for us."

Mr. Widmer joined the Julius Baer Group in 2005 as a member of the executive board and head of private banking Previous HedgeWorld Story> and became the chief executive of Bank Julius Baer in November 2007 Previous HedgeWorld Story.

The bulk of his career was spent at Credit Suisse, where he worked for 19 years, as global head of private banking from 2002 to 2005 and as a member of the executive board. Before that he was the chief executive of Credit Suisse's Asia-Pacific and Middle East business. He also worked in Tokyo and New York early in his career after gaining a doctorate in economics from the prestigious St. Gallen University in 1985.

By Katie Reid, with additional reporting by Andrew Thompson and Rupert Pretterklieber