Just over one year into his tenure as Chief Executive Officer at Quintet, Chris Allen has unveiled a significant next move for the Luxembourg-headquartered private bank. The partnership he has brokered with BlackRock aims to inspire a fresh way of working in its five main markets, one that respects the nuances of domestic investment cultures.
Quintet’s arrangement with BlackRock is the fruit of a request for proposals instigated by Allen half a year ago. Last week, the bank revealed that BlackRock had been chosen as the winning party. As the world’s largest asset manager (boasting $9.1 trillion in assets under management), BlackRock brings necessary scale to the table and enjoys an established presence in Quintet’s core markets: the UK, Germany, the Netherlands, Belgium, and Scandinavia.
Quintet’s national brand names - Brown Shipley in the UK, Merck Finck in Germany, InsingerGilissen in the Netherlands, and Puilaetco in Belgium - are well-regarded within their respective markets. Quintet’s challenge, as an Qatari-owned international private bank in an increasingly fierce global investment arena, lies in its relative size - it remains a modest private bank.
In this context - where IT systems and costs are duplicated fivefold - curtailing overheads is no mean feat. Despite this, under Chris Allen’s stewardship, Quintet has returned to profit for the first time since 2018, posting earnings of €18.1 million while overseeing nearly €100 billion in client assets. Quintet’s client assets constitute less than 1% of BlackRock’s assets under management.
Investment management platform
The BlackRock agreement incorporates Quintet’s adoption of BlackRock’s Aladdin risk management system. Over 25 wealth management firms and private banks use Aladdin - an acronym for Asset, Liability, Debt, and Derivative Investment Network. It is a comprehensive investment management platform, designed to provide a consolidated view of risk and exposure, and is employed by more than 55,000 investment professionals globally.
Adopting BlackRock’s Aladdin system comes at a price for Quintet. However, the expectation is that its clients will ultimately profit from a lower total cost of ownership for the firm’s funds. It also obviates the need for the costly development of a proprietary risk management tool across the Quintet group.
Although the precise commercial impact of the deal on Quintet is yet to be ascertained, it is clear that it carries substantial value as a unifying resource, bringing its national businesses into closer alignment. It instigates a level of harmonisation and efficiency that was previously out of reach. The ‘Quintet choir’ can now sing from the same hymn sheet - the Aladdin song - but with each member retaining their unique voice.
Compared to the assertive, hard-hitting tactics of the former UBS bankers that preceded him during the tumultuous years, Allen’s approach seems less forceful but remains bold. If successful, what began as a loose alliance between private banks across several European countries will be better prepared to tackle a competitive future.