Swiss money managers expect iran war to increase inflows from gulf

Swiss Money Managers See Gulf Inflows Rising Amid Iran War and Market Uncertainty

Middle East Conflict Drives Wealth Shift to Switzerland

By Oliver Hirt and Ariane Luthi

ZURICH, March 13 (Reuters) - Wealthy individuals are looking to shift assets from the Gulf region to Switzerland as a result of the escalating conflict in the Middle East following the U.S.-Israeli strikes on Iran, bankers and financial advisers say.

Swiss Banks Attracting Gulf Assets

More than a dozen bankers and financial advisers, collectively representing assets worth more than $1 trillion, were broadly optimistic in interviews with Reuters that Switzerland would attract more money from the Middle East, particularly after Iranian attacks on Gulf states.

Although Switzerland, long considered by investors as a safe haven, has faced growing competition from financial hubs in the Middle East and Asia, cash positions booked in the country by private individuals and non-banks from the United Arab Emirates have risen around 40% over the last three years.

Momentum Grows After Recent Attacks

This gained momentum after earlier attacks by Israel and the U.S. on Iran in June last year, said Patrik Spiller, head of wealth management at consultancy Deloitte Switzerland.

"Due to recent events, we expect that assets from the Middle East will increasingly be booked in Switzerland. We're hearing from banks, family offices, and other high-net-worth individuals that discussions are currently underway," Spiller said.

Switzerland’s Safe Haven Appeal

The Swiss Bankers Association said it could not comment specifically on asset flows from the Middle East since the recent strikes on Iran, but noted Switzerland had long set out its store as an attractive place for wealthy investors.

Political Stability and Swissness

"It's now to our advantage that we can score points with Swissness, namely secure conditions, political stability, and the rule of law. I believe this is particularly valued in times like these," said SBA chief economist Martin Hess.

After the U.S.-Israeli strikes on Iran, the Swiss franc hit its highest level against the euro in a decade.

'Swissness Works' and Market Response

Although it would likely take weeks or months for inflows to register, Switzerland could eventually see "several dozen billion" dollars coming in from the region, Spiller said.

"But that will depend a great deal on how the war develops, and how long it lasts," he added, noting cash usually came first followed later by assets such as stocks or bonds.

UBS, Switzerland's biggest wealth and asset manager, declined to comment, as did Julius Baer, which has the third-largest total of assets under management (AuM).

Swiss private bank Pictet, which ranks second largest by AuM, said in a statement it is seeing inquiries from customers, but the increase could not be described as significant.

"We reported a record high in AuM at the end of the year, despite the weak U.S. dollar, and the positive trend has continued since the beginning of the year. Swissness works," Pictet added.

European Investors Also Show Interest

Till Budelmann, chief investment officer at Bergos, a Zurich-based private bank with about 8 billion Swiss francs ($10 billion) in AuM, said the war with Iran had brought Switzerland back into focus, including among European investors.

Budelmann said one European investor who had been thinking about setting up an account requested an immediate appointment to set the process in motion after hostilities began.

While it was too early to quantify possible inflows, Budelmann told Reuters he sensed the conflict had "given a boost to Switzerland as a safe haven".

($1 = 0.7877 Swiss francs)

(Reporting by Oliver Hirt and Ariane Luthi; Additional reporting by Dave Graham; Editing by Alexander Smith)