Separation of Private Banking and
Asset Management Businesses into
two independently listed companies
Zurich, 20 May 2009
THESE MATERIALS, WHICH HAVE BEEN ISSUED BY JULIUS BAER HOLDING LTD. (THE "COMPANY"), COMPRISE THE WRITTEN MATERIALS/SLIDES
FOR A PRESENTATION TO ANALYSTS CONCERNING THE COMPANY'S PROPOSED TRANSFER OF ITS PRIVATE BANKING BUSINESS AND CERTAIN
OTHER ASSETS TO JULIUS BAER GROUP LTD. , A NEWLY FORMED, WHOLLY-OWNED SUBSIDIARY OF THE COMPANY, AND THE DISTRIBUTION OF
SHARES OF JULIUS BAER GROUP LTD. TO THE SHAREHOLDERS OF JULIUS BAER HOLDING LTD. (“THE TRANSACTION”).
THESE MATERIALS ARE BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND FOR USE AT THE PRESENTATION TO ANALYSTS. THE
PRESENTATION AND THESE MATERIALS MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY
OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, BY ANY MEDIUM OR FOR ANY PURPOSE.
NEITHER THESE MATERIALS NOR THE PRESENTATION CONSTITUTES OR FORMS PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR
ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, OR ANY OFFER TO UNDERWRITE OR OTHERWISE ACQUIRE ANY SHARES
IN THE COMPANY, JULIUS BAER GROUP LTD. OR ANY OTHER SECURITIES NOR SHALL THEY OR ANY PART OF THEM NOR THE FACT OF THEIR
DISTRIBUTION OR COMMUNICATION FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT, COMMITMENT OR
INVESTMENT DECISION IN RELATION THERETO.
THE INFORMATION INCLUDED IN THIS PRESENTATION MAY BE SUBJECT TO UPDATING, COMPLETION, REVISION AND AMENDMENT AND SUCH
INFORMATION MAY CHANGE MATERIALLY. NO PERSON IS UNDER ANY OBLIGATION TO UPDATE OR KEEP CURRENT THE INFORMATION
CONTAINED IN THE PRESENTATION AND THESE MATERIALS AND ANY OPINIONS EXPRESSED IN RELATION THERETO ARE SUBJECT TO CHANGE
WITHOUT NOTICE.
THE SHARES TO BE DISTRIBUTED IN CONNECTION WITH THE TRANSACTION WILL NOT BE REGISTERED WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR ANY U.S. STATE SECURITIES LAWS.
THESE MATERIALS DO NOT CONSTITUTE A PROSPECTUS WITHIN THE MEANING OF ARTICLE 652a OF THE SWISS CODE OF OBLIGATION OR
ARTICLE 32 ET SEQ. OF THE LISTING RULES OF SIX SWISS EXCHANGE.
2
Forward Looking Statements
FORWARD LOOKING STATEMENTS
THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS THAT REFLECT THE COMPANY'S INTENTIONS, BELIEFS OR CURRENT
EXPECTATIONS AND PROJECTIONS ABOUT THE TRANSACTION, THE COMPANY'S AND JULIUS BAER GROUP LTD.'S FUTURE RESULTS OF
OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, PERFORMANCE, PROSPECTS, STRATEGIES, OPPORTUNITIES AND THE INDUSTRIES IN WHICH
THEY OPERATE. FORWARD-LOOKING STATEMENTS INVOLVE ALL MATTERS THAT ARE NOT HISTORICAL FACT. THE COMPANY HAS TRIED TO
IDENTIFY THOSE FORWARD-LOOKING STATEMENTS BY USING THE WORDS "MAY", "WILL", "WOULD", "SHOULD", "EXPECT", "INTEND",
"ESTIMATE", "ANTICIPATE", "PROJECT", "BELIEVE", "SEEK", "PLAN", "PREDICT", "CONTINUE" AND SIMILAR EXPRESSIONS OR THEIR NEGATIVES.
SUCH STATEMENTS ARE MADE ON THE BASIS OF ASSUMPTIONS AND EXPECTATIONS WHICH, ALTHOUGH THE COMPANY BELIEVES THEM TO BE
REASONABLE AT THIS TIME, MAY PROVE TO BE ERRONEOUS.
THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES AND ASSUMPTIONS AND OTHER FACTORS THAT COULD
CAUSE THE COMPANY'S OR JULIUS BAER GROUP LTD.'S ACTUAL RESULTS OF OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, PERFORMANCE,
PROSPECTS OR OPPORTUNITIES, AS WELL AS THOSE OF THE MARKETS THEY SERVE OR INTEND TO SERVE, TO DIFFER MATERIALLY FROM
THOSE EXPRESSED IN, OR SUGGESTED BY, THESE FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE THOSE
DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO: LIMITATIONS OR CONDITIONS IMPOSED ON THE COMPANY IN CONNECTION WITH SEEKING
CONSENT FROM REGULATORS TO THE COMPLETION OF THE TRANSACTION, TRANSITION SERVICES ISSUES, CHANGING BUSINESS OR OTHER
MARKET CONDITIONS, GENERAL ECONOMIC CONDITIONS IN SWITZERLAND, THE EUROPEAN UNION, THE UNITED STATES AND ELSEWHERE, AND
THE COMPANY'S ABILITY TO RESPOND TO TRENDS IN THE FINANCIAL SERVICES INDUSTRY. ADDITIONAL FACTORS COULD CAUSE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY. THE COMPANY, JULIUS BAER GROUP LTD. AND EACH SUCH PERSON’S
DIRECTORS, OFFICERS, EMPLOYEES AND ADVISORS EXPRESSLY DISCLAIM ANY OBLIGATION OR UNDERTAKING TO RELEASE ANY UPDATE OF
OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS IN THIS PRESENTATION AND THESE MATERIALS AND ANY CHANGE IN THE
COMPANY’S EXPECTATIONS OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH THESE FORWARD-LOOKING
STATEMENTS ARE BASED, EXCEPT AS REQUIRED BY APPLICABLE LAW OR REGULATION.
FINANCIAL INFORMATION.
THE PRESENTATION AND THESE MATERIALS INCLUDE CERTAIN FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY’S HISTORICAL
SEGMENT REPORTING. THIS INFORMATION IS PRESENTED FOR ILLUSTRATIVE PURPOSES ONLY AND, BECAUSE OF ITS NATURE, MAY NOT GIVE
A TRUE PICTURE OF THE FINANCIAL POSITION OR RESULTS OF OPERATIONS OF THE COMPANY AND JULIUS BAER GROUP LTD. HAD THE
TRANSACTION BEEN EFFECTED AT THE DATE OF THAT INFORMATION. FURTHERMORE, IT IS NOT INDICATIVE OF THE FINANCIAL POSITION OR
RESULTS OF OPERATIONS OF THE COMPANY OR JULIUS BAER GROUP LTD. FOR ANY FUTURE DATE OR PERIOD.
BY ATTENDING THIS PRESENTATION OR BY ACCEPTING ANY COPY OF THE MATERIALS PRESENTED, YOU AGREE TO BE BOUND BY THE
FOREGOING LIMITATIONS.
3
Strategic Rationale
Raymond J. Baer
Chairman, Julius Baer Holding Ltd.
4
Split of Julius Baer Holding into Two Listed Companies
Shareholders
Julius Baer Holding Ltd.
159
Bank
Julius Baer2
Segment
275
116
Asset
Management
Segment
Shareholders
Julius Baer Group Ltd.
Bank Julius Baer
and other companies
Shareholders
128
42
GAM
Private Banking
x
5
147
GAM Holding Ltd.
Artio
Global1
48
Asset 57
Mgmt
Europe2
Asset Management
AuM in CHFbn (31.12.2008)
1) Unchanged intention to proceed with an IPO in 2009 depending on market conditions
2) Julius Baer Asset Management Europe (AME); including CHF31bn of Private Label Funds which
were in the segment Bank Julius Baer at year-end 2008
Creation of Two Independently Listed Companies
ƒ Julius Baer will create two distinct, independently listed entities:
ƒ Julius Baer Group Ltd.: a pure-play private bank, with a focus on
servicing and advising private clients based on a unique open architecture
platform; composed of Bank Julius Baer and other related companies
ƒ GAM Holding Ltd.: an independent active asset manager, with a focus on
manufacturing and distribution of investment products; composed of GAM,
Artio Global and Julius Baer Asset Management Europe (AME)
ƒ Transaction concludes the pure financial holding company principle
implemented in 2007: multiple-brand strategy; independent management
teams
ƒ Listed companies will be fully independent in terms of leadership, strategy,
financial and organisational set-up; certain transitional service level
agreements in place
6
Rationale for Separating Private Banking
and Asset Management
ƒ Opportunity for both businesses to deliver their full strategic potential:
ƒ Implementation of two separate business and growth strategies
ƒ Distinct target customer bases: private clients vs. third-party/institutional
ƒ Differing target geographies
ƒ Increased market visibility for both Private Banking and Asset
Management:
ƒ Sharpened individual stand-alone profiles
ƒ Improved transparency and disclosure level of each business
ƒ No significant operational changes vs. current situation:
ƒ Management teams and operations largely independent
ƒ Preservation of existing revenue synergies
ƒ Both businesses enjoying distinct brands already
7
Benefits of the Transaction
Julius Baer Group Ltd.
GAM Holding Ltd.
Private Banking
Asset Management
ƒ Leading pure-play private banking group
ƒ Independent active asset manager
ƒ High-end brand in Swiss private banking
ƒ Broad, well diversified range of
investment products: long-only funds,
discretionary portfolio management
services, alternative investments
ƒ Sharpened franchise; continued focus on
new client acquisitions
ƒ Unique “open architecture” allows further
strengthening of client service
ƒ Expanding network: Switzerland, Western
and Eastern Europe, Middle-East, Asia,
Latin America
ƒ Embedded in a less complex structure
ƒ Increased strategic flexibility for internal
and external growth
8
ƒ Continued development: institutional
client base, growth of third-party clients
and presence in the US market
ƒ Greater flexibility to form partnerships
with both institutional and distribution
partners in Switzerland and globally
ƒ Existing strong relationship with JB
private clients maintained
An Opportune Time in the Cycle
What the Market is Looking for …
9
9
9
9
Separation of PB and AM
ƒ Leading pure-play, listed private bank
Sector Leadership
ƒ Independent, diversified active asset manager
ƒ Two independent listings
Increased Transparency
ƒ Improved standalone visibility of each business
ƒ
Transaction to preserve high solvency
Strong Solvency
ƒ
Julius Baer Group Ltd. strongly capitalised
Positioned for Growth
ƒ Private Bank: international platform; strong focus
on emerging markets
ƒ Asset Management: portfolio of leading
businesses; AuM gearing
9
A Natural Step to Further Drive Value …
PB
PB
SBC
WM
Private
Banking
CH: 6 / Int'l: 6
CH: 13 / Int'l: 22
30 June 2005
Julius
Baer
Increased
Strategic
Flexibility
CHF 128 bn
CHF 60 bn
AUM
Locations
Julius Baer
Group Ltd.
31 Dec. 2008
Julius Baer
acquires three
2005
private banks
and GAM
Julius Baer
Julius Baer
Separation into
implements
operates
two distinct,
pure
2007
2008 independent 2009
individually
financial
business
listed
holding
segments
companies
structure
Targeted revenue synergies between GAM and Private Banking leveraged
CHF ~150m pre-tax cost synergies delivered
AUM
CHF 90 bn
CHF 147 bn
30 June 2005
31 Dec. 2008
AM
AM / Artio
Artio
GAM
10
Acquisitions
Asset
Management
GAM Holding
Ltd.
Increased
Strategic
Flexibility
Increased Flexibility for Investors
ƒ Transaction will increase investment flexibility of shareholders
ƒ Opportunity for investors with different objectives to select preferred
business model
1
or
Stay invested in
both businesses
Julius Baer
Group
Ltd.
GAM
Holding
Ltd.
11
Transaction Details
Dieter A. Enkelmann
CFO, Julius Baer Holding Ltd.
12
2
or
3
Invest in pure-play
private banking
Invest in active
asset manager
Julius Baer
Group
Ltd.
GAM
Holding
Ltd.
Transaction Overview
ƒ Splitting up Julius Baer into two listed companies:
Overview
ƒ Julius Baer Group Ltd. (NewCo) = Private Banking
ƒ GAM Holding Ltd. = Asset Management
ƒ Spin-off of NewCo from Julius Baer Holding Ltd.
Transaction
ƒ Distribution of 1 NewCo share for every 1 existing share
Steps
ƒ Julius Baer Holding Ltd. renamed GAM Holding Ltd.
ƒ Shareholder approval (EGM)
Conditions
ƒ Regulatory approvals
Precedent
ƒ SIX Swiss Exchange listing approval for NewCo
ƒ Early June: Invitation to EGM; publication of information brochure
Expected
Timeline
ƒ 30 June 2009 (target): Extraordinary Shareholders’ Meeting
ƒ 27 July 2009: Release of H1 2009 financials (instead of 22 July)
ƒ End Q3 2009 (target): Julius Baer Group Ltd. shares’ listing on
SIX Swiss Exchange
13
Transaction in Detail
Step 1
Step 2
Step 3
Result
Re/naming
JBH
BJB
GAM
Others
Artio
JBH
NewCo
PB
AM
JBH
G Hldg
NewCo
JB G Ltd
JB G Ltd
G Hldg
NewCo
BJB
GAM
Others
Artio
PB
Shareholders
AME
AM
PB
AME
G Hldg
JB G Ltd
PB
AM
JB G Ltd
PB
ƒ
14
Creation of
NewCo
ƒ
Private Banking
subsidiaries to
be transferred
to NewCo
ƒ
Private Banking: NewCo to be named
Julius Baer Group Ltd. (JB G Ltd)
ƒ
Spin-off: distribution of NewCo shares to
Julius Baer Holding Ltd. (JBH) shareholders
ƒ
Asset Management: Julius Baer Holding Ltd.
renamed into GAM Holding Ltd (G Hldg);
retains asset management subsidiaries
Transaction Overview
ƒ Splitting up Julius Baer into two listed companies:
Overview
ƒ Julius Baer Group Ltd. (NewCo) = Private Banking
ƒ GAM Holding Ltd. = Asset Management
ƒ Spin-off of NewCo from Julius Baer Holding Ltd.
Transaction
ƒ Distribution of 1 NewCo share for every 1 existing share
Steps
ƒ Julius Baer Holding Ltd. renamed GAM Holding Ltd.
ƒ Shareholder approval (EGM)
Conditions
ƒ Regulatory approvals
Precedent
ƒ SIX Swiss Exchange listing approval for NewCo
ƒ Early June: Invitation to EGM; publication of information brochure
Expected
Timeline
ƒ 30 June 2009 (target): Extraordinary Shareholders’ Meeting
ƒ 27 July 2009: Release of H1 2009 financials (instead of 22 July)
ƒ End Q3 2009 (target): Julius Baer Group Ltd. shares’ listing on
SIX Swiss Exchange
15
Leadership Remains Unchanged
ƒ Julius Baer Group Ltd.: Board of
Directors unchanged from today’s
Julius Baer Holding Ltd.
Julius Baer Holding Ltd.
ƒ GAM Holding Ltd.: Board of
Directors to be proposed to EGM
ƒ CEO positions unchanged
Chairman:
Raymond Baer
Group CFO:
Dieter Enkelmann
Private Banking
Asset
Management
Julius
Baer Group Ltd.
Chairman BJB:
Raymond Baer
Chairman GAM:
Hans de Gier
Chairman:
Raymond Baer
Chairman:
Hans de Gier
CEO BJB:
Boris Collardi
CEO:
David Solo
Group CFO:
Dieter Enkelmann
CEO GAM:
David Solo
CEO BJB:
Boris Collardi
16
GAM
Holding Ltd.
2008 Segmental Figures: Proxy for the Two New Groups
Julius Baer Holding
(Consolidated)
AuM CHF 275bn
Julius Baer Group Ltd.1,2
GAM Holding Ltd. 1,2
(Former segment Bank Julius Baer)
(Former segment Asset Mgmt)
AuM CHF 159bn
Revenues CHF 2,939mn
Pre-tax profit CHF 1,082mn
Revenues CHF 1,678mn
Staff 4,335
AuM CHF 116bn
Revenues CHF 1,253mn
Pre-tax profit3 CHF 629mn
Pre-tax profit3 CHF 527mn
Staff 3,009
Staff 1,261
1) Segmental figures shown as proxy for pro forma numbers; actual pro forma numbers for each two entities will differ due to allocation of corporate
centre and treasury, treatment of inter-company effects and other factors.
2) Segmental figures are shown excluding integration and restructuring expenses as well as the amortisation of intangible assets in connection with
the acquisition in 2005. The PLF business will become part of GAM Holding Ltd. as of closing of the transaction (2008 AuM: CHF 31bn).
3) Deconsolidation effect not considered
17
Julius Baer Group Ltd. – Private Banking
Private Banking
Julius Baer Group Ltd.
128
Bank Julius Baer
and other companies
Global platform for future growth
x
18
AuM in CHFbn (31.12.2008)
Julius Baer Group Ltd. will be:
ƒ Leading pure-play Swiss private bank
ƒ High-end brand in Swiss private banking
ƒ Exclusive focus on private clients – no
institutional or investment fund business;
no retail or investment banking
ƒ Broad range of wealth advisory, asset
management and custody services
ƒ Unique “open architecture” product
philosophy
ƒ International private client business
with global reach
- Some 35 locations in 20 countries
of which 13 in Switzerland
- 3,000 staff of which 300 in Asia
ƒ Positioned as consolidator in the
private banking landscape
ƒ Among the best capitalised banking
groups in Europe
GAM Holding Ltd. – Asset Management
Asset Management
GAM Holding Ltd. will be:
ƒ Leading independent active asset manager
GAM Holding Ltd.
42
GAM
Artio
Global
48
1471
Asset 57
Mgmt
Europe
Product Mix1
ƒ Broad, well diversified range of investment
products: bonds and equity funds, discretionary
portfolio management services, alternative
investments
ƒ Attractive portfolio of businesses independent
of each other
ƒ Focused on growing share of institutional
clients; retaining strong base of private clients
8%
ƒ Flexibility to form partnerships in Switzerland
7%
14%
55%
Long Equity
and globally; continue growing presence in US
Long Fixed Inc.
institutional market
Fund of Funds
ƒ Intention to proceed with IPO of Artio Global in
Alternative
2009 confirmed subject to market conditions
Mgd Portfolios
16%
ƒ Existing strong relationship with JB private
clients maintained
1) Pro forma including PLF business; PLF not considered in product mix chart
x
19
AuM in CHFbn (31.12.2008)
Financial Impact: Capitalisation
ƒ Julius Baer Group Ltd. (= Private Banking)
ƒ Objective to maintain high solvency level
ƒ Repayment of CHF225m preferred shares outstanding as a consequence
of transaction1
ƒ Despite this, transaction to preserve strong capitalisation of Julius Baer
Group (BIS Tier 1 ratio well above the current Tier 1 ratio target of 12%)
ƒ GAM Holding Ltd. (= Asset Management)
ƒ Assumed not to be subject to consolidated capital requirements
(only local requirements)
ƒ 2008-2010 buy-back programme of up to CHF 2.0bn will be cancelled
(so far CHF 300m used)
ƒ Each of the two listed companies will address their capital management
separately
1) Closing of transaction will trigger an accelerated repayment according to the terms & conditions
20
Situation for Shareholders on First Trading Day
ƒ On the first trading day, a Julius Baer Holding Ltd. shareholder will automatically own:
ƒ Private Banking: 1 share of Julius Baer Group Ltd.
ƒ Asset Management: 1 share of GAM Holding Ltd. (former Julius Baer Hldg Ltd.)
1 Share
1 Share
1 Share
Julius Baer
Holding
Ltd.
Julius Baer
Group
Ltd.
GAM
Holding
Ltd.
Nominal value
CHF 0.05
Nominal value
CHF 0.02
+
Nominal value
CHF 0.05
Tax considerations
ƒ No significant tax consequences expected at the level of Swiss / UK / US investors and
on corporate level
21
ƒ Swiss withholding taxes on newly created nominal value of Julius Baer Group Ltd. of
approx. CHF 4.1m payable by Julius Baer Holding Ltd. upon distribution of Julius Baer
Group Ltd. shares
Separating Private Banking and Asset Management –
A Win-Win Situation
GAM Holding Ltd.
Julius Baer Group Ltd.
Bank Julius Baer
and other companies
GAM
Artio
Global
Asset
Mgmt
Europe
Opportunities to deliver full strategic potential by implementing
two separate business and growth strategies
Opportunity to realise full sum-of-the-parts value
No significant operational change
Enhanced market visibility
22