Finews.com: “My Credit Swiss Colleagues Thought I Was Crazy”
Robert Weeber was working his way up the career ladder at Credit Suisse – and yet today he is head of Tiedemann Constantia, an independent investment manager. In an interview with finews.com, Weeber explains what sets his company apart from rivals in the U.S. market.
Tiedemann Constantia is a unique Swiss joint venture because your partner Tiedemann Advisors is a U.S. asset manager focused on very wealthy clients. How did this happen?
My work at Credit Suisse as head of UHNW clients in the U.K. led me to the idea of setting up my own family office consultancy firm. This resulted in Constantia in 2017. We started as pure advisors with as broad a range of services as possible, but the goal was always to be able to offer comprehensive asset management services as well.
And Tiedemann Advisors offered this opportunity?
Yes, I had known co-founder Mike Tiedemann for over ten years, but we had never done business together. Tiedemann Advisors’ goal was to expand into Europe because their American clients are very international. Simply put: These clients and their capital no longer adhere to national borders and Tiedemann wanted to be able to fully address this development. The problem was that there were limited viable options of expanding into Europe, particularly alone. It was with this starting position, two years ago, that our talks about a partnership began.
Tiedemann Advisors is more of a boutique for very wealthy clients than a solely an asset manager.
They manage $21 billion from just over 400 clients. This means that the client base is indeed «discerning» – very similar to Constantia. Tiedemann also has a very strong and established impact investing offering with approximately $2.4 billion invested. This fits well with Constantia and where we feel our strengths lie. What Tiedemann Advisors also brings is the incredible technology platform with which they work and which is particularly well received by their clientele.
Addepar, as the technology is called, is a multi-custody solution. This means, for example, that clients can aggregate data from their differently managed portfolios and view it at any time. Incidentally, Addepar was founded by Joe Lonsdale, one of the co-founders of Palantir. He built his own solution because he was not convinced by the usual investment management applications.
«We are in the middle of the onboarding process»
For Tiedemann Constantia, this means that customers not only get access to the technology, but also the support of a team of 25 experts within the company. Our clients find this particularly valuable when reporting on private equity positions.
Tiedemann brings $21 billion in assets under management to the joint venture. How much did you bring?
You must not forget that we only began accepting client assets a few months ago, so we are still in the middle of the onboarding process. We will probably bring in around $2 billion client assets.
You currently have a team of six people, Tiedemann has 21 investment experts in its nine branches between New York and San Francisco alone, a total of over 145 employees. And yet Tiedemann Advisors is a minority shareholder in the joint venture.
That is so, but it is a significant minority shareholder. It is a great sign of trust for us, but not unusual for Mike Tiedemann and Tiedemann Advisors. As co-founder of Tiedemann Advisors, he is one of 34 partners and enjoys making his employees partners. Together, all partners have approximately $500 million invested in the combined company, which is managed in the same strategies as all other client assets. This means that our interests and those of our clients are the same. After we announced the partnership, I was surprised by the positive response from clients, specifically regarding our absolute balance of interests with our clients.
And you have a great opportunity to enter the U.S. market.
Our core markets are currently the U.K. and Switzerland, but yes, the next step for Tiedemann Constantia would also be to obtain SEC approval. The timing for this step is perfect considering that Credit Suisse is once again doing private banking in Miami and UBS wants to focus even more strongly on very wealthy and international U.S. clients.
«We have a strong partner in the U.S. market»
It remains the largest wealth management market with the highest number of ultra-high-net-worth individuals and families. Last year alone, the U.S. created around 800,000 new millionaires – and it was not even a particularly good year on the stock markets.
Most Swiss banks are giving the U.S. a wide berth.
My impression is that the resentment and caution of the U.S. and connections with U.S. clients have led to excessive restraint in Switzerland. But it’s clear: despite its attractiveness, the U.S. market is also highly competitive. But we now have an enormously strong partner there. For example, Tiedemann has a 21-member investment team – which in itself sets us apart from many of our competitors.
And yet your base is now in Switzerland.
Apart from the origin of Constantia’s foundation in Switzerland, there are a number of good reasons for this: Political and economic stability, the availability of outstanding bankers and investment specialists, as well as lawyers, tax and regulatory experts, and an outstanding selection of custody banks. After all, it wasn’t only because of bank secrecy that Switzerland became the world’s largest wealth management hub.
In other words, Switzerland is one of its main markets alongside the U.S.?
Clearly Switzerland and the U.K., since my team and I have had extensive professional experience there. Another region where we see great potential is the Middle East, especially Kuwait and Qatar, where we are planning to set up a branch if possible.
Are you only planning organic growth?
Our initial goal is to win as many international clients as possible for our asset management business from our previous advisory activities. But our strategy also includes acquisitions: Teams of advisors or independent asset managers, whether in Switzerland or London.
Margins with super-rich clients and family offices are known to be worse than in the rest of the wealth management business. How do you deal with this?
In fact, our business model may not be the best: client needs are very individual, making our business difficult to scale. In addition, our clients are price-sensitive – and they are absolutely right to be. Nevertheless, the response from our clients to date shows that our independent, international setup and offering is appealing.
«I felt an entrepreneurial “itch” and decided to leave CS»
With our size, we are also in an interesting niche: in investment areas such as private equity, we can make investments that do not appear on the radar of large providers. Another advantage is our deep and long-lasting client relationships. At Tiedemann, a client stays with his advisor for an average of 14 years. In certain large banks, the client advisor changes every 18 months on average.
You had a promising career at Credit Suisse. What prompted you to give up this prospective career at the age of 35?
That wasn’t the original plan. I was fortunate enough to be able to take on a lot of responsibility at Credit Suisse very early on. In 2015, I completed an executive MBA at INSEAD. Many young bankers were switching to the fintech startup scene at that time. I didn’t, I loved my job. However, this way of thinking can also become the «kiss of death» for any entrepreneurial ambition – just working your way up the career ladder.
Then you left.
Yes, I felt an entrepreneurial «itch» and decided to leave Credit Suisse. Many of my colleagues thought I was completely crazy – and maybe one day they will be proven right. But I knew that I would be able to serve my clients far better from an independent standpoint and saw the opportunity to start my own business. You see paradoxically, having greater and greater success in a corporate career in itself becomes an rising opportunity cost when considering a new venture. The uncertainty of a venture such as this was far greater than the risk. This distinction between risk and uncertainty should always be made as an entrepreneur.
Robert Weeber, 37, is head of Tiedemann Constantia, a joint-venture with U.S. wealth manager Tiedemann Advisors. He previously led the UHNW-desk at Credit Suisse in London with 7 billion Swiss francs in assets under management. The joint-venture is a stepping stone to Europe for Tiedemann Advisors. The U.S. firm enjoys excellent relations to the Middle East.