Citi Private Bank appointed a new head of global investments Wednesday, a leader of a vital part of a wealth unit that has recently outperformed competitors.
The Citigroup unit that caters to the ultra-high-net-worth and family offices (and manages $390 billion in client assets) named David Bailin as the new global head of investments, effective immediately, replacing Eduardo Campos Martinez, who became Citi’s new global head of retail, markets and securities services. Stephanie Luedke and Daniel O'Donnell, two current Citi Private Bank employees, will assume Bailin’s previous responsibilities as global head of managed investments.
In his new role, Bailin will oversee the Private Bank’s investment business from New York and report directly to the Peter Charrington, the global head of the private bank.
In his role as global head of managed investments, Bailin was the architect of the private bank’s global managed investments platform, which includes the Citi Investment Management unit and the bank’s private equity, real estate, hedge fund and traditional investment teams. He also was responsible for portfolio management, asset allocation modeling and product innovation.
Comparing wealth management units to private banks is not always apples-to-apples but services from each can overlap.
Citi Private Bank is considerably smaller than wealth management units at other large banks, reporting second quarter revenue of $788 million. But it has grown more than competitors over the last year. Since the second quarter of 2016, revenue is up 17 percent.
Bank of America’s wealth unit (which includes Merrill Lynch and U.S. Trust) reported revenue of $4.6 billion in the second quarter and Morgan Stanley’s reported $4.1 billion. Their revenues have grown 6.1 percent and 9 percent, respectively, since the second quarter of 2016.
Bailin said “great success is a little bit of everything done well” but pointed specifically to Citi's global presence and more comprehensive wealth management offerings as reason for the recent growth.
Citi is leveraging its global presence to attract clients in need of complex portfolios, who have businesses and personal footprints spanning multiple countries or continents. Out of the private bank’s roughly 12,000 clients, he said 30 to 40 percent have highly specialized portfolio customization.
The bank has also done a better job creating a more comprehensive client experience that is attracting both core and discretionary assets, according to Bailin. There are currently about 3,000 private bank employees – one for only every four clients – and it intends to add more to the organization as demand for a heightened level of service increases.
Other areas are performing well and attracting clients and assets, too. The bank’s municipal bond advisory has lead to an uptick in new money and given them an edge because it “requires more skill and opportunities to make money,” Bailin said.
On what changes he sees the private bank making in the future, Bailin is expecting innovation in private equity in the form of more opportunities locking in funds for four to seven years, rather than five to 10.
Greater utilization of hedge funds was also something Bailin foresaw in the future. “Market conditions will not remain un-volatile for all time,” he said.