Interview with H.S.H. Prince Philipp von und zu Liechtenstein and H.S.H. Prince Max von und zu Liechtenstein
“A strong sense of family is required” H.S.H. Prince Philipp von und zu Liechtenstein and H.S.H. Prince Max von und zu Liechtenstein talk about protecting family wealth and the advantages of a family-managed bank and its future prospects.
The Euro and debt crises as well as fears of a collapse For large families it is often a problem to find a consenof the economy and the financial markets worry entresus. Are there any solid rules here? preneurs and investors. As an entrepreneurial family and H.S.H. Prince Max: Experience shows that it is always the large private investors, how do you protect yourselves? same issues and challenges that confront families. These incluH.S.H. Prince Philipp: In my view, the key factor is a healthy de succession, decision-making, conflict resolution mechanisms diversification of assets. Our family has always been involved or the question of who takes over what responsibility within the in various business sectors: in agriculture and forestry managefamily. It is important that these issues are addressed and rement, in real estate and other investments and participations. solved at an early stage. Because very individual family circumOur largest holding is the LGT Group in the financial services stances are involved here, there are no easy answers. Neverthe sector. A substantial part of our total capital is invested in the less, it could be a good idea to find out what functions for other Princely Portfolio, which is families and what one could managed by LGT Bank. In eftake over for one’s own family. “Especially in this unsettled fect, our family is therefore H.S.H. Prince Philipp: Since environment, we see that our the bank’s largest client. Sec the end of the 16th century, our stability as a family-owned company family has had a set of family ondly, it is also advantageous if one can adopt a long-term statutes, which clearly regulais highly attractive for our clients approach, at least with a part te these issues. These statutes and our employees.” of the total assets. If one thinks and the structure of our family in terms of really long time per wealth are extremely helpful esiods, short-term fluctuations are still important, but one gains a pecially when the time comes to transfer wealth to the next different perspective and can avoid hasty decisions which could generation. Of course, by themselves statutes are not sufficient. have a negative impact. A strong sense of family and common values within the family Finally, for entrepreneurs these kind of crises always have two are required in order to preserve wealth over generations. sides. On the one hand there are risks, but on the other there are opportunities. The current consolidation in the banking inWhat attributes distinguish a family-managed bank? dustry could certainly lead to interesting opportunities. H.S.H. Prince Philipp: We have the great advantage that we can think in terms of generations and we do not have to consider Preserving wealth over generations is surely a very deoptimizing short-term profits. This provides us with the necesmanding task. What must families watch out for here? sary latitude to develop strategic projects over long periods of H.S.H. Prince Max: Many entrepreneurs have built up their time and to let them grow. A second aspect is the high degree of wealth using great skill and dedication and by taking high risks. alignment between the investment interests of our clients and Once this kind of wealth has reached a certain magnitude, one our interests as a family: our clients can invest like the Princely should plan to preserve it for future generations in a systemaFamily, their assets benefit from the same expertise, the same tic and disciplined manner. At this stage, it often makes sense structures and processes, as well as from the same relationships to reduce risks and diversify assets. That’s precisely what our as our family assets. Last but not least, our clients deal with a family did about 15 years ago when we sold a part of the LGT family member or a representative of the family and not a man Group and invested the proceeds in the Princely Portfolio. If ager, who is subject to performance pressure each quarter and an entrepreneur or his successors simply continue to take high who may even have left the company six months later. Thanks risks because by doing so they were successful in the past, this to our long-term-oriented corporate culture, we have a great could have disastrous consequences. many long-serving employees. This continuity simply enables a 8
different kind of climate at discussions and meetings, which our clients confirm for us time and again. H.S.H. Prince Max: Generally, I would say that family-managed companies probably have a lower risk profile and they pursue a longer-term perspective. Especially private banking and asset management clients have a long-term perspective and a strong interest in the stability and security of their bank partner. Indeed, we build up very personal and in some cases deep relationships with our clients. They don’t like to experience too much fluctuation and change.
consolidation process in the banking industry and strongly expand our business in Switzerland. Especially in this unsettled environment, we see that our stability as a family-owned company is highly attractive for our clients and our employees.
“We have a major advantage in that we can think in terms of generations.” At present private banking institutions are going through a consolidation phase. In your opinion does the model of a family-managed private bank have a future? H.S.H. Prince Max: The acquisition of Dresdner Bank Switzerland is an excellent example of how because of the problems experienced by a large bank we were able to participate in the
H.S.H. Prince Philipp von und zu Liechtenstein, born in 1947, has been Chairman of the Board of Trustees of LGT Group since 2001. H.S.H. Prince Max von und zu Liechtenstein, born in 1969, has been CEO of LGT Group since October 2006.
Managing the LGT Group with a long-term perspective: H.S.H. Prince Philipp von und zu Liechtenstein (left) and H.S.H. Prince Max von und zu Liechtenstein (right). 9
Published on Mar 21, 2013
H.S.H. Prince Philipp von und zu Liechtenstein and H.S.H. Prince Max von und zu Liechtenstein talk about protecting family wealth and the ad...