Switzerland is legendary for its secrecy, its chocolate and its mountains. And if you hold a roadshow in Geneva or Zürich, you’ll probably experience all three. The compact cities of Geneva and Zürich both stretch around stunning blue lakes and peer out toward snow-capped mountains – so if nothing else is going well, you could still enjoy kicking back, taking a deep breath of pure Swiss air and inhaling the view. In the summer you could even schedule an evening dip in the ice-cold waters of the lake at one of Zürich’s swimming spots. Zürich is also a haven for chocolate lovers as it’s home to some of the world’s most famous chocolate firms.
But it’s the legendary Swiss secrecy that might have more impact on your business day in either city. Banking secrecy is enshrined in Swiss federal law, and a survey this year of Swiss citizens by the Swiss Bankers Association (SBA) found 76 percent were in favor of retaining that level of client confidentially.
However, these have been difficult times for Swiss banks, which have been increasingly under pressure from the European Union (EU) to hone their secrecy laws. The banks recently signed a deal with the EU that will allow them to pay a tax to Brussels on EU residents holding bank accounts in Switzerland, rather than reveal to the EU any details of the account holders themselves. That controversial legislation kicks in next year.
Swiss banks have also faced other challenges, such as increasing competition from other offshore banking zones. And their reputation took a hammering in the last few years after the uncovering of more than $98 mn in dormant accounts established during the Nazi era. Since then systems have been put in place to process Jewish claims to those bank accounts, but it hasn’t exactly been great public relations for the country.
Opening up
It does mean, though, that the Swiss financial world is in a time of flux, and perhaps more open to new ideas and innovation than it has been in the past. Adrian Rusling, managing director of the Brussels-based roadshow specialists Kuhn Partners, visits Switzerland about once a month; and his firm has been doing business in the country for around 30 years. He explains that, because of the Swiss privacy and secrecy commitments, it can be difficult to get hold of good, reliable financial data. ‘Secrecy is very important here, so publicly available data is very poor,’ he notes, adding that the worst thing you could do would be to base your expectations around poor statistics.
‘It’s very interesting, but what a lot of people don’t realize is that roughly one third of private client and international offshore funds globally are managed from Switzerland,’ Rusling continues. Indeed, the financial sector makes up 12 percent of the country’s GDP.
‘For IROs the biggest problem about Switzerland is targeting,’ Rusling says. ‘Obviously there is this tradition of secrecy: they don’t want to talk about anything. But we do a survey of European ownership of US shares for our clients and we find Switzerland has higher share ownership in US companies than anywhere else in Europe, except for the UK.’
Rusling believes there is a lot more potential in Switzerland than its reputation might suggest. He points to all sorts of opportunities, noting, for instance, that it’s the world’s biggest private client market. ‘Geneva is the birthplace of private banking and is more of a pure private banking marketplace than Zürich. People think everything is in Zürich but actually you want to tap into both these markets.’
As befits a country with four official languages, the Swiss are very international in their outlook. ‘There’s a huge level of foreign equity,’ explains Rusling. ‘And the source of funds is mainly international. Domestic equity is quite small.’
However, that proactive attitude to international opportunities doesn’t mean every big company will get an easy ride. Anja Stubenrauch, a partner at The Investor Relations Firm in Zürich, says the Swiss reputation for being conservative also applies to their investing style. If you are not well known in Geneva and Zürich, or you don’t represent a big-name brand, that conservatism may make it hard to get meetings.
‘They are not risk-friendly,’ Stubenrauch explains. ‘For a start-up, it might be difficult. If you are young, or you don’t have a certain market capitalization and you are not well known, don’t expect lots of doors to open. It’s different if you are a Pepsi or a Wal-Mart, but if you are quoted on Nasdaq it is more difficult. I would advise you to go via a Swiss bank as they have the best inroads with investors.’
Julian Beare, managing director of the London office of Allen & Caron, agrees the Swiss have more of a conservative approach than, for example, UK-based investors. ‘In London you will find investment in Russian oil and gas, or in African interests, but in Switzerland you won’t get anything like that,’ he says. ‘They are weighted toward bonds rather than equities – and they like long-term investment.’
As far as popular industry sectors go, the biotech/life science sector has a high profile in Switzerland. There are 227 home-grown biotech companies that employ around 13,000 people. Mining and gold are also always in favor. With current concerns about the value of the US dollar and sterling, some people see the Swiss franc and gold as a possible safe haven.
‘As a broad brush, mining, gold and life science/biotech are strong sectors here,’ agrees Rusling. ‘The Swiss have some strong science companies and fund managers do like biotech.’
Setting the scene
When deciding how to conduct a Swiss meeting and considering who should be there, there are some basic rules that apply. ‘It’s important to have a CEO or CFO in a meeting – you don’t tend to get a decent turnout with just an IRO,’ warns Beare.
But Rusling disagrees. He believes some of the big name IROs can hold meetings without the presence of a CEO or CFO and still get a reasonable audience.
Stubenrauch adds that quality is important to the Swiss. ‘The biggest asset managers are sitting here,’ she says. ‘They have high expectations of perfectionism. They will expect definite figures and lots of detail.’
Rusling says it’s also a good idea to prepare a company message. ‘More so than in the US and UK, companies need to sell a strategic message here,’ he says.
Traditionalism affects attitudes to what you are wearing as well as what you present. Go conservative; wear a dark suit and don’t use first names – this is a formal culture. ‘People are very well dressed, very elegant,’ Stubenrauch concurs. ‘They would always wear a tie. Suits are conservative gray. The whole setting of a meeting is more formal here than it might be in other countries. People expect investment in the location.’
No one will expect your presentation to be translated into French or German, but it’s polite to greet people in their language – especially in French-speaking Geneva. The Swiss generally speak excellent English, and not just in business: hotel and restaurant staff are also typically bi- or tri-lingual.
Typically for continental Europe if you are planning your visits for the year ahead it pays not to include July or August in your calculations as the holiday season is in full swing and key players are likely to be away.
But packing plenty of meetings into a short space of time is easy in Switzerland as both Zürich and Geneva are compact. If you are moving around it will take you just minutes to get from Place du Cirque to Rue du Mont-Blanc in Geneva, for example. Almost everything is within 20 minutes walk of any other destination in both cities, and most business people choose to walk rather than take a cab; it’s just simpler. Plus, in Switzerland, taxis are on the expensive side.
Some people may prefer to try and present everything from their hotel. In Zürich, the Baur au Lac and the Widder are favorites – as long as your budget can stretch that far. Both are centrally located, and easy for all parties to reach.
‘Some banks prefer to have a presentation in-house, but they will expect it to be held somewhere central,’ Stubenrauch notes. ‘Do not consider doing something at the airport, for example – it won’t work.’ And presentations should be pitched at around an hour and a half.
The Swiss tend to be a little judgmental when it comes to the room and fare on offer so consider trading up to something stylish and offering some reasonable refreshment. ‘The whole setting is more formal than New York or London, so it pays to invest in your location,’ adds Stubenrauch.
Timing is reasonably flexible, but while mutual fund managers are happy to meet you for breakfast, private bankers are less likely to come along to morning meetings as their working day tends to start later.
Lunch presentations are popular but, while they can be useful for targeting a wider range of investors and sparking new interest, one-to-ones are more likely to deliver a deal. ‘Lunches very often don’t produce many questions,’ says Beare. ‘People feel constrained about raising queries.’ Rusling agrees, adding that the Swiss can be cautious about asking questions in an open session, preferring to save their queries for a one-to-one.
Finally, don’t ignore the power of the Swiss press to help deliver your message. Two to work with are Neue Zürcher Zeitung and Finanz und Wirtschaft. The financial editors are interested in international stories, but few companies take advantage of this.
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Swiss fund managers
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Equity assets, $ bn
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| UBS Global Asset Management (Switzerland) |
36.6
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| Government of Switzerland |
14.0
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| Credit Suisse Asset Management |
9.6
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| Capital International |
7.6
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| Novartis |
7.3
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| Caisse fédérale de pensions publica |
7.2
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| Swissca Portfolio Management |
7.1
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| Novartis Foundation for Employee Participation |
4.2
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| Pictet & Cie |
4.0
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Source: Thomson Financial
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Key sell-side firms
Bank Sarasin & Co
CAI Cheuvreux Switzerland
Deutsche Bank Securities (Zürich)
Kepler Equities Switzerland
NZB Neue Zürcher Bank
SISM Research & Investment Services
Vontobel Securities
UBS Securities (Switzerland)
Source: Thomson Financial
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Largest Swiss banks
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SFr
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| UBS |
1.2 tn
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| Credit Suisse Group |
55.7 bn
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| Raiffeisen Gruppe |
92.7 bn
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| Zürcher Kantonalbank |
80.5 bn
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| EFG Bank Group |
41.2 bn
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| HSBC Republic |
36.2 bn
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| Banque Cantonale Vaudoise |
35.2 bn
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| BNP Paribas (Suisse) |
25.2 bn
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| Migros Bank |
24.9 bn
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| Basler Kantonalbank |
22.9 bn
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Source: Handelszeitung
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Media contacts
Cash
Dirk Schütz +41 1 298 2811
Bilanz
Rene Lüfinger +41 43 444 5520
Neue Zürcher Zeitung
Hugo Bütler +41 1 258 1111
L’Agefi +41 21 331 4141
Where to stay, where to eat, and what to see
Geneva
Hotels
Hotel President Wilson
47 Quai Wilson
Tel: +41 22 906 6666
Hotel Crowne Plaza Geneve
26 Voie-de-Mo?ns
Tel: +41 22 747 0202
Restaurants
La Perle du Lac
Rue de Lausanne 128
Tel: +41 22 909 1020
Lakeside dining
Restaurant du Parc des Eaux-Vives
Quai Gustave-Ador 82
Tel: +41 22 849 7575
French cuisine
L’Amphitryon
Hotel des Bergues
33 Quai des Bergues
Tel: +41 22 908 7040
Great fish
What to see
Jet d’eau, Promenade du Lac
Stunning 500-foot fountain
Patek Philippe Museum,
Rue des Vieux-Grenadiers
Amazing museum of watches
Zürich
Hotels
Hotel Widder
Rennweg 7
Tel: +41 1 224 2526
Hotel Zum Storchen
Am Weinplatz 2
Tel: +41 1 227 2727
Hotel Baur au Lac
Talstrasse 1
Tel: +41 1 220 5020
Restaurants
Carlton Restaurant & Bar
Bahnhofstrasse 41
Tel: +41 1 227 1919
Beautiful Art Deco restaurant
Restaurant Kronenhalle
Rämistrasse 4
Tel: +41 1 251 6669
Very elegant, with original Picassos
Restaurant Sonnenberg
Hitzigweg 15
Tel: +41 1 266 9797
Gourmet restaurant at the Fifa headquarters
What to see
Confiserie Sprüngli, Paradeplatz
Huge chocolate shop
Lindenhof Platz
An open-air square with giant chess and great views
