Four and a half years ago, KBL Richelieu changed shareholders and developed the Banque Richelieu brand. To take stock of its evolution, we meet Alexandre Hezez, Strategist of the Richelieu Group, and Thomas Lhuillier, Managing Director of Banque Richelieu Monaco.
Alexandre Hezez, you are both Director of Financial Management at Richelieu Gestion and Strategist for the Richelieu Group?
I am actually the head of Richelieu Gestion, which specialises in the construction, management and distribution of funds. It is the group's hub of expertise in terms of management, asset allocation and strategy, so I am responsible for all the UCITS managers. I am also the strategist responsible for the Richelieu Group's investment strategy, both for France and for Monaco. This allows me to develop an investment strategy that is directly anchored in the financial markets, without rhetoric, with the clear objective of adding value to portfolios.
Banque Richelieu has a strong reputation, whereas asset management is less well known. The arrival of our new shareholder in 2018 coincided with the rebuilding of this type of service, which seemed interesting both for our clients and in terms of external development. Indeed, for the past four to five years, the distribution of our House funds has been taking place, with other banks, wealth management advisors or family offices. This growth validates our strategy.
What types of funds do you distribute?
We wanted to concentrate our range of funds (nine 8 funds at present) with one particularity: the individualisation of funds in relation to the managers. This is the opposite of the traditional approach: we do not create products before finding their managers. Our managers build their long-term funds according to their expertise and convictions. People are at the origin of the product, not the other way around.
Without making an inventory, can you name a few?
Richelieu was historically known for its management of small and medium-sized European companies: this was its core business until 2008. Two managers are perfectly familiar with the governance of this type of company, they work on the Richelieu Family Small Cap fund which includes European companies with a family history.
Richelieu America ESG is the fund in our range that has developed the most in our range, thanks to a manager who is an expert in the US stock market. He has selected companies that pay a steadily growing dividend to their shareholders, and which therefore generate recurring cash flow. He has then supplemented this aristocratic pocket of the portfolio with small and medium-sized companies in buoyant sectors.
We also have an opportunistic fund (Richelieu Harmonies ESG), which does better than passive management, through dynamic asset allocation.
Finally, Richelieu Obligations 26 is a very conservative bond fund. The management methodology is extremely disciplined, it is a dated fund (2026) which allows a diversification of issuers with good quality ratings.
ESG funds seem to be of primary importance in the choice of investors. Is this the case?
Yes, and it is far from being a constraint for us. Extra-financial analysis allows us to ask the right questions about the growth and sustainability of an activity. It creates added value, allows us to obtain a longer-term vision of the company and to ensure its long-term growth. Our funds are all ESG-labelled (SFDR 8), with a rigorous process developed in partnership with rating agencies. All the companies in our thematic fund Richelieu CityiZzen have an activity directly linked to the environment.
Thomas Lhuillier, in Monaco, Richelieu is above all a private bank?
The model we defend is a private banking boutique model, which responds to the values of agility and pragmatism. This allows us to offer our clients, even those with multiple banks, the attention and quality of service they are looking for... Nevertheless, it is true that the creation of a management company in the Principality would typically allow us to increase our market share with key accounts...
KBL Monaco came under the banner of Banque Richelieu Monaco in August 2018, how did the transition go?
Good: we did not lose any clients or staff. From a strictly accounting point of view, we have gone from 700 million assets under management in 2008 to 3.1 billion at 31 December 2022, and 3.4 billion today. Our annual NBI, which was around ten million euros at the time, will reach a little over 34 5 million euros in 2022, and we will have around one hundred employees by the end of the year.
This is a substantial development that is the result not only of a change in strategy but also of the recruitment of a number of employees and an expansion into international markets. We went looking for regular, resilient and solid growth drivers, which now allow us to pursue this growth dynamic.
Is credit also a growth driver?
We have gone from just under 200 million euros in loans to a little over 800 million euros today. But we did not build our growth in Monaco on credit. The Richelieu Group wants to position itself in the private management segment in the purely noble sense of the term, by being able to offer real estate financing or Lombard loans.
What about international growth?
We are developing through several geographical desks.
We are present in Cyprus to domicile certain commercial and corporate activities of our clients. Our desks are located in Europe and Western Europe, in Abu Dhabi, in the Middle East and in North Africa. A hybrid desk, the business development desk, focuses mainly on Europe and in particular on Central Europe (Croatia, Slovakia, Czech Republic, Poland, etc.). We are also present in French-speaking Africa (Ivory Coast, Senegal, Togo, Benin, Guinea, etc.) and Nigeria. Finally, our CIS desk is part of a development strategy in Central Asia (Kazakhstan, Uzbekistan, etc.). Our international locations are organised around Cyprus where we domicile certain commercial and corporate activities of our clients and in Abu Dhabi where the Richelieu GCC brand is represented by a team of private bankers implemented within the Abu Dhabi Global Market. All these desks are a differentiation in our commercial policy.
The booking centre for accounts opened in Abu Dhabi is Monaco?
Absolutely. From Monaco, we took over the operation of a banking licence from the Dormant Group in Abu Dhabi, where we now have a representative office with a staff of around ten. The staff are responsible for the local market in the Emirates, Saudi Arabia, Qatar and Bahrain; they are international and multilingual bankers with a good command of local networks. Since the desk opened, it has generated €500m in new money by managing this strategic area in a different way to ensure the steady growth of our assets.