Whenever swiss financier eric syz was developing up, their textile industrialist dad whoever family members business dated returning to the 1850s, provided him an unexpected word of advice.
He said you could do whatever you wish but dont enter textiles, recalls the now 63-year-old. he believed there was clearly no future in european fabrics in which he ended up being appropriate.
Unlike his father, mr syz, which presides over syz group, the private lender and asset supervisor he co-founded in 1996, would not discourage their sons from following in his footsteps. but in an echo for the headwinds that hit the old family members company, he and his future heirs face an uncertain road.
Syz, with possessions under management of sfr27.4bn, reaches a switching point. after making its title as a personal lender specialising in high-performing asset administration a feature that noted it out from other swiss banking institutions at the time which relied greatly on income tax and banking privacy its fund unit has suffered several years of bad performance and declining assets.
In addition, exclusive banking institutions are grappling with increasing costs and weaker margins. at syz, group earnings have declined annually since 2016, culminating in a sfr25m reduction in 2019 mainly driven by outflows from asset management.
This caused an overhaul within group in 2020, because of the choice taken fully to offload oyster, its retail asset management business, while focusing rather on more lucrative area of personal possessions.
Speaking via video telephone call from his geneva workplace, mr syz states seismic alterations in the financial investment business over the past decade justified your decision. retail asset management is a scale company, [and] competition is getting fiercer and fiercer, he states, pointing towards the persistent growth of inexpensive passive resources.
Mr syz retains faith in energetic administration: the exclusive lender nonetheless operates worldwide diversified funds and certainly will continue to use some oyster funds in its customer profiles. syz in addition operates a sfr10bn institutional asset management business, mainly concentrated in fixed-income.
However, he says it really is harder right now to generate consistent good returns. ultra-low interest rates therefore the developing efficiency of areas have discouraged supervisors from using high-conviction wagers. the possibility of diverging too-much through the list is indeed large that 80 percent of energetic managers tend to be obligated to be index huggers, he states discussing those active funds that usually perform like and track an index.
Syzs recent fund performance is a world independent of the fantastic age regarding the oyster range, which had 6bn in assets at its peak in 2007, in contrast to 2bn during the sale.
Mr syz is happy with the devices legacy. [we were] fertile surface for great skill, he reflects, discussing managers such eric bendahan and nicolas walewski, whom went on to setup their own boutiques.
But resources such as the flagship european equity fund mr bendahan regularly operate have faltered recently, lagging their benchmarks over three and 5 years. other key financial investment staff have departed, such as chief financial investment officer fabrizio quirighetti, while supervisors includinghead of european equities michael clements,left after the oyster range had been offered.
The challenges of delivering standout overall performance via listed equity investing led syz to personal assets.
[private assets] are where we are able to include price to our consumers, he claims. in place of advising them buying this or that investment and then make 12-13 percent return, wed instead do even more work and also make 20-25 %.
Overseen by marc syz, the creators elder son, the personal possessions unit takes direct stakes in organizations with valuations of between sfr100m and sfr200m.
The syz family invests its cash alongside its clients, targeting concealed gems, particularly tiny businesses in fragmented sectors or family-owned companies that need growth capital.
Mr syz believes family businesses in many cases are the best-run companies thanks to the way they just take rational as opposed to governmental choices, have great control over prices and dont invest a cent a lot more than needed on income tax. the fact syz is family-owned provides it credibility when supplying funding to these organizations, he claims.
As with any family company, conjecture is rife concerning that will succeed mr syz. his detachment in 2019 from day-to-day management of the lender as well as the marketing of both his sons, marc and nicolas, to crucial functions had been widely regarded as the first step into the teams succession program.
But mr syz gives bit away, noting that both sons enjoy their particular present roles. [they] might determine they do not wish to run the store [...] i think they're both management product but time will inform.
He elected a non-family member, yvan gaillard, to dominate as he stepped right back as ceo of syzs lender unit. and he distances himself from claims of nepotism, pointing away both sons slashed their teeth outside the group.
Though mr syz insists the dynamic is nothing beats the one portrayed in succession, the hit hbo television series about feuding siblings battling to take control of your family company, he acknowledges their sons are competitive. they as soon as had aspirations to become expert skeleton cyclists, having found winter months sliding recreation inside alpine resort of st moritz.
Not that the lively mr syz, whom techniques skeleton in the free time also, has actually any imminent intends to retire. personally i think quite young and can keep achieving this for the next couple of years.
Mr syz began his finance job at london-based investment bank sg warburg, in which he worked under business veteran consuelo brooke inside asset administration division. he claims ms brooke, one of the few feminine faces at the lender, convinced him to stick with finance.
I learnt much from the lady and also have the utmost respect the method she was able to position herself in what at that time ended up being a totally male-dominated industry, he claims.
In 2019 he appointed their partner suzanne, a high-end jewelry designer, to syzs board to bring a larger feminine perspective toward company. he adds it had been essential to choose a relative to make sure the teams primary shareholder was represented when any such thing took place to him.
He and suzanne can be the power few. they own a massive art collection that they display inside their geneva residence and provide to museums, including pieces they obtained whenever the main 1980s nyc art scene.
He leaps within possiblity to reminisce about blending with andy warhol and jean-michel basquiat. studio 54 with andy warhol ended up being another thing, he states, his eyes lighting-up.
Mr syzs socialite inclinations fit well with his work taking care of clients and sounding on family businesses to invest in. because of the coronavirus pandemic having brought in-person meetings to a standstill, he is wanting to get back on the highway in 2021.
But he says the digital interactions that became typical in 2020 will stay. [through the pandemic] we actually got nearer to clients because the frequency with which we interacted with them increased. once that change has taken place, its very hard to go back as to the you performed prior to.
Possessions under management sfr27.4bn (as at 31/12/2019)
Ownership principal shareholder eric syz
Born 1957, new york
1972-77 lyceum alpinum, zuoz, switzerland
Total pay not revealed
1979-81 asset administration and vendor financial, sg warburg, london
1981-84 institutional stock-broker accountable for worldwide relations, paine webber, nyc
1984-96 established merchant banking business for lombard odier; person in the administration board
1996-present co-founder and leader, syz group