The end of Swiss banking secrecy has done little to dissuade the wealthiest of Germans from setting up in Switzerland.
By David Bain, guest author
Very rich German industrialists, food billionaires, and retail magnates like the Thyssens, the Beisheims, the Schmidt-Ruthenbecks, the Bechtolsheimer-Kipps, and the Muellers all have set up investment offices in Switzerland and continue to retain their services.
Family Capital, an online publication covering global family enterprises, compiled a list of 50 of Switzerland’s biggest single-family offices (behind paywall). More than half – 29 – were set up by foreigners.
Although some of them have since become Swiss citizens, fourteen of the 29 of these family offices were set up by individuals and families who originally came from Germany.
Drug-Making Dynasties
The secretive vehicles don’t disclose their assets under management – but in many cases, it’s likely to run into billions of dollars. With annual running costs of upwards of $1 million, family offices start to make sense with at least $100 million in assets.
That is the minimum; by contrast, the Hoffmann and Oeri families, which control 45 percent of Roche, are estimated by Swiss outlet «Bilanz» to be worth nearly $29 billion. Take for instance Andre Hoffmann and family’s 1.5 percent ownership of the Basel-based drugmaker.
That would give Hoffmann an annual dividend of more than $900 million on the Roche holding alone. There’s no way of knowing, but a sizable chunk of that money is likely to flow into his family office to make other investments – and that happens every year.
Italian Neighbors
For the three members of the Rausing family, who own a family office based down the road from the headquarters in Pully of the huge food and food packaging company the family owns called Tetra Laval, the annual dividends are likely to be substantial.
Wealthy Italians are also well represented on the list with five owners originally from Switzerland’s southern neighbour, including a member of one of the country’s wealthiest families, the De Benedettis, who own extensive media holdings.
Prominent Families
Swiss pharmaceutical billionaire families and individuals like the Hoffmanns and Oeris, Sandoz family (the generic drug-maker is now part of Novartis), and the Bertarellis (the family sold Serono to German Merck in 2006) are prominent among the owners of family offices in the country.
Hansjoerg Wyss, the Swiss multi-billionaire and medical equipment entrepreneur, also maintains a family office in the country. Members of the Rausing family, originally from Sweden and part owners of the huge food and food processing company Tetra Laval, control one of the country’s biggest family offices.
Flocking to Zurich
As with trends in the rest of the world, single-family offices, which were originally set up to manage wealth more indirectly and their owner’s tax affairs, are increasingly investing directly. Of course, a by-product of doing this type of investment means they have become more transparent.
Geographically, the greater Zurich area, which along with Switzerland’s biggest city includes towns around Lake Zurich and the two cantons of Zug and Schwyz, is the biggest location for family offices in the country, with 19 based there. Zug and Schwyz remain popular locations because of their low tax regimes.
Dotted in Small Towns
The greater Geneva area, which includes the city as well as the canton of Vaud is the location for 15 of the country’s family offices. But, given the different tax rates of the cantons and the excellent connectivity of the country, many of the country’s family offices are based in sometimes small towns and cities throughout the country.
Switzerland officially ended its famed banking secrecy rules in October 2018. There was some concern at the time, at least among the country’s substantial private banking sector, the move might undermine Switzerland’s attractiveness to the world’s wealthy.
David Bain is the publisher of Family Capital, an online publication covering global family enterprises.
