Prisma Reports (PR): Kaiser Partner is a leading wealth management group, which includes the 5th largest bank in Liechtenstein by assets. Mr. Kaiser, you are the owner of Kaiser Partner. To start this interview, can you give us a little background about yourself?
Fritz Kaiser (FK): I am a Liechtenstein and Swiss Citizen and I can look back on some 40 exciting years in which I have enriched my professional life in the financial services industry by venturing into the world of sports, the arts, cars and philanthropy. After participating in the 1976 Olympics in Montreal as a Judoka, various famous sporting celebrities asked me to help them make money out of their medals. Later on, I experienced the excitement of a truly fast-moving business in the permanent media spotlight in my capacity as the chairman and co-owner of the Red Bull Sauber Formula One team. The Mentor Foundation is a global charity founded by the Queen of Sweden, and my service as trustee and later on as chairman of this international NGO taught me that it feels good to help young people say no to drugs.
Throughout all these years, I have been privileged to meet and work with many exciting and intellectually stimulating personalities from around the world, which has substantially enriched my life.
(PR): One of the interesting things about your group of companies is your responsible investment and sustainable banking approach. You have been personally involved in the issue of responsible use of wealth for years now. How did you start developing these ideas?
(FK): It all started at the World Economic Forum (WEF) back in 2005, at a time when I had sold my interests in the Swiss Diners Club credit card business and in the Formula One team, and when I was reflecting on my life. During that time, I was interested in better understanding what responsibility really means for owners of private wealth. So, I invited a couple of wealth owners from around the world to debate these questions. Former US vice-president Al Gore, whom I met at the WEF in Davos, was part of this initiative. We concluded back then that the world is developing at an unprecedented pace, and that we were responsible for ourselves, for our families, for our society and for the planet. It seems simple, but that statement still applies today.
Following this experience in Davos, Al Gore played a central role in helping develop what we called “The 9 Drivers of Global Change”. We concluded at a subsequent meeting that we wanted “to navigate wealth on the right side of global change within a fast-moving world”.
Finally, we translated this way of thinking into a responsible investment formula by redefining the parameters that guide our investment decision. As a consequence, our bank was one of the first institutions to sign the Principles of Responsible Investment (PRI) Declaration, and since than we have constantly developed our investment practice in this field. Looking at our clients’ interests in this context, we find that investors fit one of two fundamentally different profiles. There are investors for whom it’s all about the return on investment - short or long term depending on what they want; and there are investors for whom the return is not the only preoccupation – they also want to know what the company they invest in does and if their investment fits with their philosophy of life. The latter type of investor is becoming more common nowadays, especially within the younger generation. For me, it was interesting to learn that responsible investing does not mean you have to accept a “performance-discount”: this approach can deliver very good results, especially when you are looking for longer term ROIs.
(PR): Can you give us some examples of responsible investments that Kaiser Partner is leading?
(FK): The following example from our own family investment portfolio demonstrates our approach to responsible investment.
Energy transition was one of the drivers of global change that we identified together with Al Gore. When Germany decided to exit nuclear energy with its “Energiewende” program and to focus on renewable energy, we founded a company called Seawind to buy distressed assets in the field of offshore wind projects in the German Baltic Sea. Four years later, our project “Baltic Eagle” was successful in the 2018 German energy auction. The Spanish energy company IBERDROLA will now build this 476 megawatt offshore wind farm, which in a few years will deliver green energy for about 1 million households in Germany.
We believe that renewable energy will be good for our planet. Based on this philosophy, we took some investment risks and brought in our own professional engineering and management team to develop offshore wind farm projects. This means building a large group of wind turbines, each of them as tall as the Eiffel tower, out there in the Baltic Sea. In this case, our ambition to navigate our investments on the right side of global change was rewarded with a highly attractive return on investment, and a good feeling that we were doing the right thing.
Another area of personal interest for me revolves around the classic car market. Being myself a collector of sports cars from the ‘50s and ‘60s, I founded The Classic Car Trust. Our team has spent considerable time and effort researching the global classic car market. With the annual publication of “The Key - top of the classic car world” we are sharing this market knowledge with interested stakeholders and we have, for the first time, published a ranking of the top 100 classic car collectors worldwide. These 100 collectors together own cars worth US$ 8 billion. 56% of the collectors are in the US and have an average age of 72. Our research also shows that this market is coming to a crossroads, hence we have launched several initiatives to foster the heritage, enjoyment and preservation of classic cars in this fast-moving world.
(PR): Kaiser Partner has received many awards across the years, including best private bank in Liechtenstein for the 5th year in a row at the World Finance Banking Awards 2018, best multi-client family office in Liechtenstein also this year. How does Kaiser Partner stand out in its approach or business model?
(FK): In today’s complex business environment, with its monster-system of cross-border regulations, you will have a hard time finding one single global champion that knows the solutions to all the challenges involved in navigating your international wealth through times like these. With the “Kaiser Partner Wealth Table” model we take the time to talk with wealth owning families until we really understand their fundamental questions. Such questions can span from how to protect, manage and grow wealth to talking about succession, family governance or educating the next generation; from identifying the right investment or M&A opportunity to legal structuring and investment controlling. Formulating the real question often takes quite some time, and only then can we bring the right expertise to the table - be it from our own specialist teams or from our international network of expert partners.
In times of growing insecurity and complexity we probably stand out because we try to understand the big picture, because we help important private wealth owners to ask the right questions, because we want to offer value with bespoke solutions instead of just selling products, and because we want to be very good at what we do. We currently take care of clients from 20 different countries, and as a group of companies we look after some 30bn US$ in private wealth as trustees, administrators or asset managers. And our business is growing.
(PR): One of Kaiser Partner’s mandates is to help wealthy individuals and families from the US, or with ties to the US, to safeguard their assets in Switzerland. What kind of specific expertise does Kaiser Partner Financial Advisors Ltd. offer to US citizens, especially in regards to tax reporting and efficiency? Why should they choose to work with you specifically?
(FK): Wealth owning families in the US that wish to invest abroad will find that Switzerland and Liechtenstein are attractive, secure countries within Europe that can serve as their international investment hub. Our company offers these clients a full range of services, from investment advice to investment controlling and US tax reporting.
On the other hand, there are global families that deal with the US dollar in some way or other, or that have a link with the US – perhaps their kids are educated in the US, or maybe they have a house or other assets there. They need a professional partner who knows how to deal with US-specific topics.
In any event, if you are participating in the global economy, you have to deal with the US as the biggest economy and you have to play by the rules there. It is in this context that we built up our US unit, and decided to register our financial advisor company in Zurich with the SEC. This means we can offer a US perspective and a specialist US team for clients at our “Kaiser Partner Wealth Table”.
(PR): Mr. Kaiser you played a central role in the Liechtenstein Declaration, which ushered in a paradigm shift in the country’s attitude towards international cooperation on tax offenses. How has the Swiss/Liechtenstein banking model transformed since 2008 and the global economic crisis? What kind of conclusions can you draw 10 years later?
(FK):Liechtenstein has a long history as an international trust hub for families. Our own trust company dates back to 1931. With the fallout from bank secrecy and the introduction of the automatic exchange of information, we are in a whole new international game now for offshore jurisdictions. For me it was clear back then that the practice of hiding assets from the taxman in offshore centers would not survive longer-term at a time when countries were struggling to balance their budgets.
Liechtenstein was an early mover in this development, and obviously such disruptive change always brings some suffering, and we did lose some important clients when we started to go down that route. But looking back today, it’s clear that this was in fact a healthy development. The industry had to rethink its approach and business model, had to change its past beliefs and educate clients about big picture developments. That was quite radical in Liechtenstein, especially since we made that transition before Switzerland started to do so.
Looking back now, I can see that Liechtenstein has mastered the change well over the past 10 years. The financial center has reinvented itself by applying sound principles and adopting recognized global standards and good practices as a wealth management hub in an S&P AAA-rated economy. Within Europe we stand out as a safe haven. Of course, there are other interesting countries and cities in Europe, but the EU is complicated. Switzerland and the Principality of Liechtenstein are small and stable. We play by the rules and we have nothing to hide.
(PR): What is your final message to conclude this interview?
(FK):In times of growing political instability around the world, global wealth-owning families will discover that the Principality of Liechtenstein and Switzerland offer a safe, reliable and professional hub for their international wealth holding and for their investment activities. And Kaiser Partner is there to help.