1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
After updating our model, we increase our fair value estimate for Julius Baer to CHF 69 per share from CHF 57 per share previously. We keep our wide economic moat rating. On a midcycle basis we estimate that Julius Baer can generate a return on tangible equity of 20%, comfortably ahead of the 8% we estimate for its cost of capital.
Julius Baer was founded in 1890 and expanded significantly in 2005 when it acquired three Swiss private banks and Global Asset Management, or GAM, from its far larger Swiss rival, UBS. In 2009 Baer spun off GAM as a separately listed firm. The acquisition of Merril Lynch's wealth management operations outside of the U.S. in 2012 increased Baer's assets under management by 40% and increased its footprint outside of Europe. Julius Baer is currently the largest pure-play private bank in Switzerland and the third-largest Swiss private bank. Baer provides private banking services principally to individuals in Switzerland and Europe and increasingly in Asia and other emerging markets.
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