blue - The Art of Giving

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The Art of Giving

Summer Edition 2013

“There are huge transactional areas that are not neutralised by money. In the case of these transactions, there are different bonds that arise, and different obligations. It’s here, in this area, where gratitude and generosity are at home.”

Peter Sloterdijk, German philosopher

Editorial

Dear readers, There is nothing particularly difficult about giving, at the end of the day. “Giving” only becomes an art when it is meant to bring about a long-term positive change and improve the lives of others.

Targeted and engaged giving continues to play an important role in modern society. Making a personal as well as a financial commitment to a heartfelt cause is not about doing something fashionable, but following a tradition that has been with us for a long time.

As the German philosopher Peter Sloterdijk says in his interview with blue, the people behind a foundation have made a decision: to care about something, to advance a cause. The framework within which foundations operate, however, has changed considerably. In this sense, giving has indeed become more difficult – and more challenging for a foundation’s benefactors.

Art emerges at the intersection of know-how, experience and passion. In our view, this is especially true when it comes to the art of giving.

I wish you a thought-provoking and interesting read through our collection of articles on the art of giving.

Cordially yours,

Georg Schubiger, Head of Private Banking

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Photo: Corbis

Content

A plea for more generosity.

Welcome to Myshkinia, or why voluntary giving is so important.

An interview with the German philosopher Peter Sloterdijk.

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Photo: laif

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Photo: Getty Images

12 Serving the public interest, the elegant way.

Is charitable giving a new trend in the USA? Prof. Georg von Schnurbein sees it more as a continuation of a long human tradition through the ages.

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How to measure giving?

Generosity comes in different sizes.

Much too good for the rubbish.

Investing in proven structures.

Why the “Stiftunglife” Foundation is committed to the foodbanks operated by “Die Tafeln” and is thus promoting already existing ideas and concepts.

Foto: Gallerystock Photo: Pat Molnar, Gallerystock

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Photo: Keystone

Competence: The professionalisation of foundations. The motivations behind establishing a foundation are, for the most part, the same today as they have been for hundreds of years. How a foundation is successfully managed, however, has changed fundamentally.

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Competence: German foundations in need: in search of security and return.

Navigating the regulatory framework for foundations in Germany is a challenge.

Innovation and passion for the cause are required.

Macro: Bernanke & Co. are helping equities. How the central banks are influencing the high and low pressure areas on the economic front.

Competence: Sustainable Investing – from fig leaf to the “must do�.

The three pillars of sustainability prove themselves as the basis for investment decisions.

Picture: Ullsteinbild

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Blue pages: News from the Vontobel Group.

A compilation of news from all our business areas.

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Interview by Urs Thaler

Thinking and acting with generosity. For these goals, the German philosopher Peter Sloterdijk has been engaged for many years. He posits an ethic of giving, in which even the outstretched hand of the state, poised to take, is critically scrutinized.

Theme: The Art of Giving

A plea for more generosity Peter Sloterdijk, together with friends of yours, you created the Myshkin Prize to honor persons who distinguish themselves by special acts of generosity. Was it difficult to find a suitable winner?

No. Since we had thought things through very well and had some very intensive discussions about it, last year we were even able to name three winners for the Myshkin Prize. It was a moving ceremony in January 2012, as we awarded the prizes in front of a large audience at the Théâtre National de l'Odéon in Paris.

What prompted you to create this prize?

In conversations with friends, my wife, a Dutch and a German friend, my French publisher and I came to the conclusion that there are still some people in the world whose human achievement is underappreciated – despite the fact that they have distinguished themselves by acts of exemplary generosity.

Were you already thinking of a particular person at the time?

If I remember correctly, our conversation first revolved around the great Italian psychiatrist Gaetano Benedetti, who in the early 1980s had written an epoch-making work about the nature of schizophrenic illnesses. With his book Todeslandschaften der Seele (“Death Landscapes of the Soul”), he created a masterpiece of empathic psychiatry. What occurred to us was the fact that Benedetti hardly plays any role any more on the psychotherapeutic scene in Germany, Switzerland or even in Austria.

So you honored him to rescue his name from oblivion?

It seemed to our friends in any case that this unique work by Benedetti deserved more attention. However, our discussions didn’t stop with him. In the end, we decided to give the award to three laureates.

Who else did you choose?

In addition to Gaetano Benedetti, we awarded the prize to the Austrian animal rights activist Martin Balluch and the French diplomat, lawyer and – if you will – political educator Stéphane 6 Vontobel blue Theme

Hessel. The awards ceremony at the Paris Odéon was a moving experience for all the guests, a real coup de cœur. That’s not surprising when you know how brilliant and charming Hessel could be in front of an audience. At 94 years of age, he recited poems by Apollinaire, Baudelaire and Hölderlin, and wowed the audience with the message that it’s worthwhile to be old and crazy.

At the awards ceremony in Paris, your welcome speech was entitled “Welcome to Myshkinia”. Is Myshkinia an imaginary country where people are more generous than in real life?

Yes, an imaginary country, to a degree, but also a country where, as children, we all had the right to be citizens. Most of us, as adults, have left Myshkinia behind for one reason or another, and emigrated into the world of egoists. What our friends wanted to do was remind people that we have a right to return to Myshkinia.

As a philosopher, you deal with anthropology, with the study of mankind. But you make a distinction between bright and dark anthropology. What do you mean by that?

The darkening of anthropology reached its apogee in the era of the religious wars of the 17th century – and has remained that way ever since. Many doctrines contributed to this development: the ideas of Thomas Hobbes, of de Sade, of Marx and Freud, the competing theories of the 19th century and all the pessimistic-realistic images of mankind that have been popularised by the so-called Enlightenment. But in all these centuries, there have always been thinkers who have had brighter views of Homo sapiens. Especially the English and Scottish moral sense philosophers contributed to the mitigation of the systematic denigration of humankind. One of my favourite authors from that period is Lord Shaftesbury – a thinker whom hardly anybody reads any more. He had a lasting influence on the young Goethe. Shaftesbury emphasised the enthusiasm of sociability. To him, man was a being whose best virtues unfold within society.

Photo: Philipp Horak, anzenberger

German philosopher Peter Sloterdijk pleads for an ethic of giving.

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In that respect, could your prize also be understood as a way to prevent the cooling of people’s attitudes toward each other?

Maybe. The idea of an award, I readily admit, is completely ambivalent. These days there are prizes for just about everything in the arts, literature and science. Therein lies a profound paradox.

With prizes, you reward people for something that in principle needs no reward, because in the classic view, any action of value carries within it its own reward. It has an intrinsic value that is valid, with or without a prize. For Thomas Mann, it should have been satisfaction enough that he was capable of writing such a fascinating book as Buddenbrooks. Why should he also receive the Nobel Prize in Literature on top of that? A clever man once said, “All you need to know about prizes is that Mozart never got one.”

and not on the side of gifts. Nevertheless, we should not forget that behind the world of commodities, a constitutive giving and taking is unfolding, which extends beyond the exchange of goods. The non-commodity aspect of the giving and taking always forms the foundation on which the commodity-based transaction itself plays out. This applies to every part of our lives. For example, the good teacher imparts more to his students than merely the material he’s paid to teach. Or, for the gift of life and the affection they give their children, parents don’t receive any payment. Or friends exchange ideas amongst themselves without any pecuniary considerations coming between them. In other words: there are huge transactional areas that are not neutralised by money. In the case of these transactions, there are different bonds that arise, and different obligations. It’s here, in this area, where gratitude and generosity are at home.

“Society doesn’t realise that in

many ways, it’s much better than

And yet you and your friends endowed the Myshkin Prize anyway.

We live in a period in which, more and more, a feeling for the obvious is being lost. We look at everything as if in a hall of mirrors. We don’t know whether we’re seeing the real thing or just a reflection bouncing back and forth. What were once virtues, we call values today. And these values live by being constantly adjusted, confirmed or reassessed. In addition to the values themselves, you always have to find people who are willing to embody them. Because that is true, concerns about prizes ought to fade into the background. The Zeitgeist requires reflection, and reflection always includes emphasis, enhancement and the theatricalisation of the things you are trying to promote. So it’s fitting that of all places, we conferred the Myshkin Prize on stage at the Théâtre de l'Odéon in Paris and that the next awards ceremony, in 2014, will take place in the Leipzig Gewandhaus.

it thinks.”

You once said that one could only understand modernity in the moral-philosophical sense if one grasps that it is an institution for concealing gestures of generosity.

It is true that generous people in society always generate an atmosphere of ambivalence. For that reason, it makes sense for a generous person to be discreet in his activities. Jacques Derrida defined the essence of the ideal gift as being when the giver of the gift doesn’t even notice that it has any effect, whilst the recipient mustn’t notice that he’s receiving anything at all. I think this is a noble exaggeration. It’s sufficient if we recognise the fact that every transaction between people has a certain inherent ambivalence.

What is this ambivalence?

Most people would prefer to transform a gift into a commodity.

Almost everyone feels better when he can buy then things he wants to get, instead of having them given to him as a gift. The purchase neutralises the personal transaction. That’s why, in the modern world, we have come down on the side of commodities 8 Vontobel blue Theme

This brings us to another topic that is important in the context of good giving and taking: taxes.

This an issue that is currently driving half Germany up the wall.

This tax obsession has even become a German export product, making its way to Switzerland. Within Germany, we’ve already lost all sense of proportion in these overheated debates on the subject.

How so?

In this country, our discussions are all based on reflexes and resentments. On the other hand, you have Switzerland. As I see it, Switzerland has taken an exemplary path in terms of its system of taxation, and other European countries could learn a lot from the Swiss. Here, taxes are regarded as citizen’s taxes, and this approach brings the aspects of voluntariness and debt, or of spontaneousness and obligation, into balance, all in a model framework. The reason for this is obvious: in a democratic system of taxation, the dual nature of taxes must always be clearly visible, i.e. an obligation is required in order to satisfy justice and secure sufficient funds to meet the community's various tasks. Just as important, it’s also necessary for taxes to be voluntary; if they are not, they remain levies that are forced upon the people, as in the case of absolutism. In the Swiss concept of taxation, unlike in the rest of Europe, the donation-like character of citizens’ payments into the coffers of the commonwealth is quite pronounced. I understand that in Switzerland, there are communities that even thank their taxpayers at the end of the year for making a contribution toward the proper functioning of the municipality. If you were to suggest such a thing to a German tax authority, he would surely faint dead away at the sheer horror of the idea. Our tax system is still designed as an authoritarian system. Taxpayers, whether rich or poor, remain subjects of the Treasury.

That has consequences.

From a psychological standpoint, it cannot surprise anyone that tax authorities who don’t respect their citizens can expect little respect from their debtors in return. In Germany’s authority-centric tax system, which one can only see as a relic dating back to the latter part of the Age of Absolutism, it’s not astonishing at all that there is an increasing tendency to avoid paying taxes. In contrast, Switzerland has a very low rate of tax evasion compared to other countries. So even in matters of taxation, it seems to pay off to treat citizens as free people, and not as subjects.

A harsh judgment.

It could be. Nevertheless, I’m convinced that the paternalistic systems of taxation in Europe have a lot of the past in them, but not much of a good future. They emanate from the concept of the paternal-caring state that thinks it knows what its children need. This dictatorship of caring – whose roots go back to 17th-century notions of the absolutist state – leads to the supposedly wise determination of the child’s debt to his “father”, the state. But citizens are not children, and they’re less and less able to deal with the psycho-political misconstruction of the modern tax-based state. Modern governments should distance themselves from such paternalistic systems of taxation as quickly as they can. If European countries aren’t willing to learn from Switzerland, then they could also learn a lesson by observing the USA. There, duty and honour are also in much better balance than over here. This is reflected in the fact that, in addition to their massive tax obligations, Americans also carry out an adventurous and active philanthropic life. In the United States, life as a citizen begins where forced taxation ends and voluntary donations begin.

Regarding philanthropic passion, the Americans seem very far ahead of the Europeans.

I remember a statistic from the Center on Philanthropy at Indiana University. This showed that in the year 2008, nearly 310 billion US dollars were donated for philanthropic purposes the

Photo: Philipp Horak, anzenberger

Seen that way, the taxpayer is an eternal debtor, and thus from the perspective of the tax authorities, he is de facto a subject, a subordinate.

Contrast that with Switzerland. With your concept of citizens’ taxation, you’ve taken a different, better path. Your starting point is the citizen, not the state. It is the citizen, and not some government officials seated in an exalted capital city, who determines how high the tax rates will be. And for sure, it’s only when taxes can be repositioned as a matter of honour, and they represent an honourable donation toward the common good, that one would be able to curb the reflex of trying to avoid paying taxes – a reflex that invariably occurs amongst people who feel that they are simply being fleeced by the taxman. Honesty in the matter of paying taxes increases as soon as you turn taxes into a question of honour, instead of seeing them as a perpetual debt, and the taxpayers as perpetual debtors.

German philosopher Peter Sloterdijk, aged (65) is one of the most prolific and inspiring cultural anthropologists in Germany.

His work regularly triggers controversial debates. Sloterdijk, who is also rector of the College of Design in Karlsruhe, is characterised by an encyclopaedic erudition, as well as an international network like no other German philosopher. Recent publications of his include Zeilen und Tage (“Lines and Days”), Die nehmende Hand und die gebende Seite (“The Taking Hand and the Giving Side”) and Du musst dein Leben ändern (“You Must Change Your Life”).

United States – whilst in that same year, the total German federal budget signed off in Berlin came to about 280 billion Euros, and our philanthropic donations amounted to 4 billion Euros. So depending on how you calculate it, the philanthropic activity of Americans is 10 to 20 times more intense than in Europe.

Perhaps generosity and openness are simply things that Americans are better at than we are?

It would appear so. Classical philanthropy has its origins in the Anglo-Saxon world, where a lot of experiences that are essential for the development of a donor culture have accumulated over time. They show that both tendencies are present in people: the tendency to be generous, and the tendency not to be generous.

It just depends on which of these two sides of this ambivalence we choose to appeal to and stimulate.

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16.1 foundations are registered in Switzerland for every 10,000 inhabitants – a significantly higher ratio than abroad. By comparison, the number of foundations per 10,000 inhabitants in Würzburg, Germany (which has that country’s highest proportion of charitable foundations), is just 7.7, less than half the Swiss ratio.

80,000

children’s laughs were “donated” in the past year by the 142 hospital clowns working for the Theodora Foundation in its many projects worldwide. www.theodora.ch

171 litres of blood

Photos: AFP, Getty Images, Gallerystock, Keystone

have been donated by South African Maurice Creswick since his 18th birthday (he is now 87 years old), earning him a spot in the Guinness Book of Records in 2010.

100 years is how long the Albert Schweitzer Hospital in Lambaréné (Gabon) has been in operation, making it certainly the oldest European development project in Africa.

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13,966 rescue missions were flown by Rega

(the Swiss Air Rescue Society) in 2012, an average of more than 38 flights every day. www.rega.ch

750 million hours of work each year are donated by volunteers in Switzerland alone.

50 billion Swiss francs is the estimated total

principal endowing the philanthropic foundations in Switzerland, meaning that for each Swiss citizen, about 6,500 Swiss francs in charitable endowments exist.

79% of all the Irish donated money to charity in 2011, making Ireland the country with the most donors in relation to the size of its population.

a dozen Stradivarius violins

More than

are lent out to talented young musicians by the Stradivari Society, a philanthropic society in Chicago. This foundation, started by Mary Galvin, calls upon philanthropists from around the world to make the priceless instruments they own available for a limited time to the lucky musicians selected, thus ensuring that the dulcet tones of the Stradivarius continue to sound on stages all around the world. www.stradivarisociety.com Vontobel blue Theme 11

Foundations are his area of research. Prof. Georg von Schnurbein of the University of Basel.

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by Angela Obrist // Photo: Christian Grund

Topic: The Art of Giving

Serving the public interest, the elegant way Doing good has always been part of being human. In the past few decades, institutionalised philanthropy has experienced a major boom, with many new foundations springing up. These often serve as engines of change and provide an elegant platform for charitable action. Professor Georg von Schnurbein specialises in research on philanthropical activity at the University of Basel. In our conversation with Prof. von Schnurbein, he explains what is happening on the philanthropy scene.

Three years ago an announcement made headlines around the globe: forty billionaires in the United States had committed themselves voluntarily to donate at least fifty percent of their wealth to charity. About a decade earlier, Microsoft founder Bill Gates and his wife had already caused a stir with the establishment of the Bill and Melinda Gates Foundation, which today is by far the largest private foundation in the world.

Has doing good become a trend? Georg von Schnurbein, Assistant Professor of Foundation Management at the University of Basel and head of its Centre for Philanthropy Studies (CEPS), would not go quite that far. “Throughout history, there have always been philanthropic activities – not uniform in nature, and called by different names – but they have always been present.”

His centre has set itself the objective of conducting comprehensive research on philanthropy, also from an interdisciplinary point of view. Its areas of investigation range from the good governance of foundations to the management of nonprofit organisations and relevant issues in the social sciences.

Georg von Schnurbein is an Assistant Professor of Foundation Management and the Director of the Centre for Philanthropy Studies (CEPS) at the University of Basel, an institution established by SwissFoundations, the Association of Swiss Grant Making Foundations. He studied management and political science at the Universities of Bamberg, Fribourg and Bern. Prof. von Schnurbein is the author of numerous publications on topics such as foundation structures, good governance, nonprofit management and marketing. Currently CEPS, in conjunction with a consortium of European research institutes, is conducting research on the involvement of foundations in the promotion of science.

According to Prof. von Schnurbein, interest in institutionalised philanthropy has significantly increased in the past few years.

This development underpinned the establishment of the CEPS, which was founded in 2008 with start-up financing provided by a number of foundations. But Prof. von Schnurbein has focused on the topic philanthropy for over a decade. “I’m fascinated by the idea that in my work, I can deal with economic issues,” he explains, “but at the end of the day, it’s not the monetary aspect but the charitable social benefit that comes into focus.”

Endowments of Swiss foundations have doubled In Switzerland and Germany, the willingness on the part of the public to donate to charity is overall very high. About three people out of every four make a donation of some kind once a year. Institutionalised philanthropy has also flourished in the past few years, with the total amount of assets dedicated to endowing foundations in Switzerland doubling over the last fifteen years. Estimating the total assets held by Swiss foundations in 2012, the CEPS arrived at a figure of around 70 billion Swiss francs. Between 1.5 to 2 billion francs are distributed by these foundations every year – an impressive number, and one that is not known by most people. “Foundations often work in the background,” says Prof. von Schnurbein, “and for that reason, the public is barely familiar with the important social role they play.” This enormous growth in endowments can also be observed in other western countries, such as in the USA or Germany. “You could say that foundations are the children of an affluent society. Once a certain degree of prosperity has been reached, it leads to the establishment of new foundations,” says the Basel-based expert.

Tax breaks are not the motivating factor The fact that foundations are experiencing such a boom is not surprising to the head of the CEPS. “Foundations are a very elegant form of serving the public interest,” he explains, “because you can combine self-interest with charitable activity.” Often the founders are aiming to give something back to society; motivations are very diverse. One misconception, however, Prof. von Schnurbein can definitely refute: “As can be seen from many real-world examples, the tax breaks accruing to the benefactors of private foundations are relatively irrelevant,” he says. “If someone has decided to donate part of his wealth to a foundation, he usually doesn’t care how much he is saving on his tax bill. ”A more critically important factor for the benefactors, however, is that they can engage with an issue that is close to their Vontobel blue Theme 13

hearts. This is why social causes and health care have traditionally played a particularly important role in the world of foundations, as have cultural themes. Education and research are gaining in importance as well, because many benefactors recognise that government funding in these areas is no longer sufficient. There are other areas with catch-up potential, too: “When you compare the distribution of funds from foundations and funds from nonprofit organisations, you can see that there are many gaps that could be narrowed, for example in the area of environmental protection,” says Prof. von Schnurbein.

about whether a foundation is the right vehicle and whether the amount of the endowment will be sufficient. Often, he says, founders overlook the fact that a foundation also generates supervisory, auditing and administrative costs, which must also be met from the proceeds earned by the endowment. He therefore warns, “Given the current situation in the financial markets, the situation can quickly arise where there is barely enough money to cover the obligatory costs. When nothing is left over for the charitable work, unfortunately, that is when many foundations simply become inactive, static constructs.”

Benefactors are often bolder than governments Foundations occupy a special place in society, enjoying a very high degree of credibility. Although the amounts they distribute in Switzerland are significant in many areas, in the educational and social sector, they only represent a drop in the bucket compared to government spending. “But even this one ‘drop’ often makes all the difference,” says Georg von Schnurbein. “That’s because foundations usually promote things that are not supported by the government. In this way, they reinforce the diversity of society.”

For this reason, Prof. von Schnurbein absolutely recommends developing a comprehensive business plan before establishing any foundation, specifically detailing the foundation’s costs over a period of ten to twenty years. Also essential for the success of a foundation is taking great care when appointing members of its Board of Trustees and deciding on its other relevant bodies.

“Once the foundation is operating, you have to set targets and review them consistently,” he recommends. Transparency is especially important for a foundation. “A foundation receives its legitimacy only by virtue of the fact that society recognises what it dies. This is why transparency is essential.”

“Foundations these days are not always set up to last forever.”

Foundations are also considered engines of change in the non-profit sector, where they often trigger new things. In this role, their structure is an advantage: Due to their legal construction, foundations are independent, and compared to the government or to large corporations, decision-making is quicker.

“They are not living from one quarterly earnings report to the next,” says the professor, “so they’re better able to think and act for the long term. In addition, the foundation's various governance bodies don’t have to answer to shareholders, or always keep one eye on their re-election. A foundation can weather a bad decision much better than a company or the government can.” As long as a foundation keeps its engagements focused on its purpose, it can invest in a technology, even if maybe later this proves not to have such a promising future after all. This greater freedom means that foundations are active, and quite bold, when it comes to investing in research or unusual social projects.

“Thanks to their dauntlessness and their ability to innovate, foundations have paved the way for many valuable achievements,” says Prof. von Schnurbein.

Requirements for a successful foundation For many wealthy people, happily, there is a strong desire to transfer part of their assets into a foundation. However, on the path to a successful foundation, there still lurk some stumbling blocks. For example, a foundation is a relatively static structure.

Once a deed of foundation has been established, changing it can be difficult. For Prof. von Schnurbein, it is therefore crucial that someone considering establishing a foundation should first think 14 Vontobel blue Theme

Philanthropy has a future Although philanthropy is now many centuries old, happily it has not lost the ability to adapt to new circumstances. Georg von Schnurbein observes more flexibility in the way philanthropic concepts are dealt with today. For example, an increasingly important theme these days is the hybrid nature of foundations. In other words, the managers responsible for a foundation attempt to link social and economic goals together. “The approach is to solve a social problem by setting an economic objective,” he explains. Many foundations regularly review the effectiveness of their engagements, making sure that every franc in the foundation is used as efficiently as possible. Other approaches are being developed as well, such venture philanthropy, in which management methods used by venture capital specialists are applied to charitable activities.

Increased flexibility is also reflected in new foundation forms. For example, foundation benefactors can make use of umbrella foundations to establish a fund or a sub-foundation with a specific purpose, thus saving administrative and asset management costs. By means of umbrella and collective foundations, it is also possible for people to become philanthropically engaged who would only like to invest smaller amounts.

“As a matter of principle, foundations these days are not always set up to last forever,” says Prof. von Schnurbein. “Experience shows that there are very few foundations that have survived

Photo: Reuters

USD 36.2 billion is the current size of the endowment of the Bill and Melinda Gates Foundation. Warren Buffet (on the right) also supports this foundation, the world’s largest.

several centuries.” Based on this understanding, a new form of principal-depleting foundation has come into being: Instead of investing an amount of less than five million Swiss francs and then distributing its investment income bit by bit over several decades, a principal-depleting foundation distributes its money over a period of, say, ten years, after which the foundation is dissolved.

The current difficult economic environment, which is creating challenges for the trustees of a foundation when it comes to managing its endowment, has led to a new trend on the acquisition side, the so-called mission-related investment. As Georg von Schnurbein explains, from a legal point of view, the public-interest objectives of a foundation are usually met only with its earnings, not with how its underlying endowment is invested. “In an extreme case,” he says, “this could lead to the paradoxical situation that the foundation's assets are invested in companies that, through their activities, bring about exactly the problem that the foundation, based on its purpose, is aiming to alleviate.” So in the case of a mission-related investment, in addition to the orientation of the earnings, attention is also paid to how the endowment is invested in the first place, so that this is also aligned with the foundation's purpose. Thus, not only the earnings generated by the endowment but also

the invested endowment itself are used to meet the objectives of the benefactors.

Do good, and talk about it Foundations have a lot of development potential from a geographic point of view, too. Whilst institutionalised philanthropy in the industrialised world can look back on a long tradition, in many places in the emerging markets it is still in its infancy. But even in countries such as China and India, there are already numerous charitable activities, according to Georg von Schnurbein.

“Whilst foundations are controlled by the state in China, in Brazil, for example, there is the problem that the government wants to influence the work of private foundations, which is significantly dampening this type of engagement,” he says. Globally active Western foundations that wish to operate in emerging markets often have to learn expensive lessons. ”Several international foundations wanting to expand their activities in India or China have failed,“ he says. ”In the Far East, for example, it was not looked upon favourably that US foundations wanted to shout from the rooftops about their charitable activities.“ It’s quite possible that European foundations, with their more discreet nature, would be more welcome in Asia. But ultimately, Prof. von Schnurbein suspects, the American approach will probably prevail worldwide. In other words: Do good, and talk about it.

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By Marlies Keck

Theme: The Art of Giving

Much too good for the rubbish Not everyone gets his daily bread – even though there is food in abundance. Stiftunglife, based in the German city of Celle, supports an organisation called “Die Tafeln” (“The Foodbanks”) which collect and distribute surplus food to the needy: “feedback” in the most literal sense.

It is not always necessary for foundations to reinvent the wheel.

Often it is simply a question of taking a look “outside the box” to discover ideas that have proven successful elsewhere. For example, the foundation Stiftunglife (“Foundationlife”), as a charitable organisation for life and the environment, has decided to promote existing ideas and concepts. One of these projects is “Die Tafel” (“The Foodbank”), which was initiated 20 years ago and is active today everywhere in Europe collecting food that has been produced in surplus, but which is still of impeccable quality, and passing it on to people in need. In Germany alone, the organisation has over 900 locations today. “Through their work, the Foodbanks have brought two phenomena into the public’s consciousness in the last few decades: poverty and food waste,” says Jürgen Gessner, founder of Stiftunglife. He adds: “For a long time, neither problem was taken very seriously. Things are different today.”

off their meagre budget so they can make other vital purchases.

At the same time, they can maintain social contacts, seek advice and assistance. For Gessner, the needy are not “cases”, but human beings who need concrete support and attention. It is for them that he, along with many Lions Clubs throughout Germany, have engaged themselves. Every month, they bring a refrigerated lorry full of food to the Foodbanks. To make this happen requires donations in addition to the foundation’s own funds. These donations not only help achieve the foundation’s mission, but also come with a “happiness guarantee,” as Gessner calls it. This guarantee means that the donor can see how his money is actually used: A few days after receipt of the donation, the amount is visible in the transparent account, and it can be traced from there on its path to being spent and settled. “If the donor is happy with the way the money was used,” Gessner explains, “he gets a receipt for his donation. If he’s not happy, we will pay the money back.” In a time in which even the “compassion industry” has a few black sheep, this is a laudable practice.

“Thanks to the Foodbanks, both sides benefit – those who have too much, and those who have too little.”

Donations with a happiness guarantee The Foodbank idea is as simple as it is effective: Volunteers collect food from manufacturers and retail outlets. The food is in perfect condition, completely fit for consumption. They then pass it on to people in need. For the users of these Foodbanks, the support means a lot. The food supplements their diet, and takes pressure

Die Tafeln – The Foodbanks In addition to the many Foodbanks that have originated from citizen initiatives, major government-supported welfare organisations have also participated in establishing Foodbanks as well. In particular, the local chapters of Diakonie, Caritas, AWO Workers' Welfare Association, the Red Cross and the Joint General Association support many Foodbanks. www.tafel.de / / www.schweizertafel.ch

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275,000 fully loaded lorries According to Gessner, the Foodbank movement was a grassroots movement from the beginning, spreading throughout the

Stiftunglife – Foundationlife Stiftunglife has no administrative costs, because everyone working for the foundation is a volunteer, and – as with a hobby – pays his own expenses. In addition to the Foodbanks in Germany and Europe, the foundation also supports projects abroad with a focus on education and health. www.stiftunglife.de

Photo: Gabriela Herman, Gallerystock

Distributing food instead of throwing it away. That is the goal of the German foodbanks known as “Die Tafeln”.

entire country. Foodbanks are much more than secular charities; they are a phenomenon of our affluent society. Since coming into existence, the Foodbanks have called attention to food waste.

And food waste is everywhere: in the food industry, in the wholesale trade, in bakeries and supermarkets, restaurants and canteens. And last but not least, in every household. In Germany alone, some eleven million tonnes of food end up in the rubbish every year. That is the equivalent of 275,000 fully-loaded lorries.

This was the finding of a study by the University of Stuttgart which was funded by the Federal Ministry of Food, Agriculture and Consumer Protection.

help of donors and charitable organisations, they are saving some food which can be saved. For Jürgen Gessner, the concept of the Foodbanks is worthy of support for two reasons: “Thanks to the Foodbanks, both sides benefit – those who have too much, and those who have too little. Waste is reduced, and people in need get help. A classic win-win situation.” He only wishes that one day, there would be no more need for the Foodbanks. But as long as there is social inequality and an overabundance of food, the Foodbanks will serve their purpose, fulfilling a permanent task of our society.

In Switzerland, two million tonnes of perfectly edible food winds up in the garbage each year – almost half from private households. This is mainly because the expiration date has passed. But also thrown away is excess from the kitchen and food scraps.

At the same time, one billion people go hungry worldwide. Of course, none of them will get a full stomach simply because we throw away less. But the more we consume and waste, the greater is the demand for food on the world market and thus the more prices rise worldwide. It is not only developing countries that are hit by these price increases, but currently many countries in southern Europe as well, which due to the financial and sovereign debt crisis have to spend a large part of their disposable income on food.

Annual food waste in Germany in millions of tons

Win-win situation For the Foodbanks, these circumstances are not acceptable – neither from an environmental nor from an economic perspective.

If it were not for the Foodbanks, tens of thousands of tonnes of perfectly good food would be pointlessly thrown into the garbage each year. The natural resources and energy which went into producing these foodstuffs would all be wasted. But with the

Source: BMELV; März 2012

Wholesale

0.6 large-scale consumer

1.9 food industry

1.9

about

11 million tons

household

6.7

Vontobel blue Theme 17

By Christophe Bernard, Chief Strategist, and Dr. Walter Metzler, Senior Economist

Macro:

Bernanke & Co. are helping equities Steps to stabilise debt levels in the Eurozone, the Yen printing presses cranking up in Japan, economic bright spots in the USA, lower growth rates in China – on the economic front, both high and low pressure areas are currently forming. What’s next?

But before the look forward, one more look back. Among the important events of this year is the spectacular easing of Japanese monetary policy to combat decades of deflation. Even the United States, where the economy seems to be poised for a jump – all the odds against it notwithstanding – forced us to sit up and take notice. In China, however, growth rates are weakening, although the country’s economic development, as seen with Western eyes, is still enviable. Also worth mentioning are developments in Europe, which we will discuss in some detail below.

Institutional strengthening of the Eurozone Three years after the onset of the European debt crisis, hopes for sustainable fiscal stability are awakening. Contributing to these hopes are the new cornerstones of European financial order, namely: the European Stability Mechanism (ESM), the European Fiscal Pact and the guarantee of the European Central Bank (ECB) to prevent excessive distortion in interest rates on government bonds – known by the acronym OMT (Outright Monetary Transactions).

The ESM will grant bridging loans to the Euro countries with financial problems; these credits will be linked to fiscal and economic policy conditions. The most recent example of this is the programme for Cyprus. However, given its limited size of around 500 billion Euros, the ESM would not be able to cope with serious problems arising in the large countries in the Euro zone.

The European Fiscal Pact has been in force since the beginning of 2013. It commits the Euro member countries, by the end of 2013, to anchor a debt brake if at all possible at the constitutional level. Specifically, this means that the cyclically adjusted budget deficit may not exceed the value of 0.5 percent of gross domestic product (GDP). In addition, the Fiscal Pact stipulates that within 20 years, debt is to be reduced to 60 percent of GDP (see chart 1). A long-term consolidation requirement of this nature is completely absent in the USA or Japan.

The precondition for an OMT programme is, according to the ECB, that a country requesting support will be monitored by the ESM. The European Fiscal Pact is clearly the key point in the new European institutional architecture. In support of the objectives of the Fiscal Pact, the European banking union is to prevent a ballooning of public debt brought about by rescuing too many banks only important at a national level.

Government debt in % of GDP 2013 Reducing public debt to 60 percent of GDP within 20 years will be no walk in the park.

Greece

193.2

Portugal

133.1 129.6

Italy

127.7

Ireland 108.2

France

102.9

Belgium Spain

100.2 86.2

Germany 65.5

Finland

0% 50% 60% 100% 150% 200% Source: Thomsen Reuters Datastream

18 Vontobel blue Macro

Against this background, interest rates in the southern Euro countries have regressed significantly. This year and next, fiscal policy will have a weaker economic braking effect than it did over the last few years. The recent interest rate cut by the ECB is brightening the economic outlook as well. For these reasons, we have built up a position in Euro-based equities in our investment policy, especially since their valuation is very attractive.

High liquidity in the equity markets In our view, equities will remain the focus of interest, whilst the bond markets are likely to continue struggling with cash outflows. This shift into shares will be favoured by the extremely generous monetary policy in the USA, and in the meantime also in Japan: In the wake of liquidity measures, a portion of the money is still flowing in the direction of equity markets. In this context, markets such as Russia also appear attractive. In this cyclical market, with valuations particularly favourable at the moment, we recently initiated a position.

Dollar on the threshold of new strength phase The further steps taken by the US Federal Reserve will be of central importance for the financial markets. We expect a continuation of the extraordinary liquidity injections by the Fed at least until the year 2014. As for Europe, our initial expectation is that the debt crisis in the Euro zone will not get worse. Looking at exchange rates, this means that the Euro could rise first against the dollar and Swiss franc. But as soon as it is foreseeable that the Fed is phasing out its liquidity programme, the chances will increase that the dollar will strengthen. This is because US bond yields are likely to rise faster if there is a slowdown in purchases of securities by the Fed. In addition, it is expected that the boom in energy from unconventional sources will trigger significant capital flows into the United States. With increasing domestic oil and gas production, fewer imports will be necessary. This will provide sustainable relief to the US current account balance, which will also benefit the dollar. To take advantage of this turn in the greenback trend, we have significantly increased investments in US dollars.

Photo: Reuters

In the wake of increasing appetite for risk, we see a continued upward trend in interest rates in the solid countries. This is especially true for Germany and Switzerland, less so for the USA, where the Fed continues the purchases of bonds. We ex-

pect the best returns to be on high-yield bonds and emerging market debt.

Ben Bernanke, President of the Federal Reserve Board, the USA’s central bank.

Vontobel blue Macro 19

By Daniel Bruderer, Head of Relationship Management Global Themes, Vontobel Asset Management

Theme: Competence

Sustainable investing – from fig-leaf to the “must do” Why invest “sustainably”? The trend of salving one’s conscience by investing in “green” company is passé. Today it is increasingly the view that companies scoring high marks when it comes to sustainability also tend to generate a financial value added and therefore belong in the portfolio.

Sooner or later, foundations ask themselves how “sustainable” their portfolios should be. But first, a remark on the term itself.

“Sustainability” is like a sponge that soaks everything up: every client, and everyone offering these investments, defines sustainability differently. Serving as the basis for the industry are the Principles for Responsible Investing set out by the United Na-

tions (UN PRI). The signatories commit to align their investment business to the three pillars of sustainability – environmental, social and governance, commonly termed simply “ESG” (see figure 1). These principles are meant to effect a high degree of transparency in the area of sustainability in the companies in which they invest.

Minimum Standards Framework 9 critical ESG factors, each scored from 0 – 10, or F (fail)

Environment (E)

Social (S)

GOVERNANCE (G)

Environment Management System • Environmental considerations integrated into key processes • systematic targets, monitoring

Employee relations • Fair compensation • Training, health and safety • Equality of recruitment

Board efficiency • Independent diversified board • Separation of CEO and Chair • Independent auditors

Eco-efficient operations • Emissions and water use disclosure • Waste and resource use policies

Social & economic development • Code of conduct • Ethical policy • Human rights

Shareholder rights • Disclosure of structure • No anti-takeover devices • Founder privileges

Supply chain • Responsible marketing • Health and content claims, labelling • Supplier monitoring

Executive remuneration • Transparency and appropriateness • Compensation models link to ESG • Independent compensation committee

Average (S) score

Average (G) score

Product stewardship • Use of life cycle assessment • Ecological impact of products • Packaging reduction and recycling

Average (E) score

Average ESG Score > 5 to be investable Any F score fails the entire rating.

20 Vontobel blue Theme

In selecting suitable candidates for a “sustainable” portfolio, many providers first choose companies according to financial criteria, and only much later – after most of the analytical work is done – do they apply a sustainability filter. In doing so, they make use of “sustainable” benchmarks – for example, the MSCI World ESG Index – and “pull” some of the companies in the index into the portfolio. In other words, they hand over responsibility to someone else. Yet providers of sustainable products should form their own opinion as to which companies comply with environmental, social and/or ethical standards, and which do not. Only this way can asset managers meet the needs and expectations of the clients.

So from the outset, sustainability and financial criteria should carry similar weight. An integrated approach helps keep risks as low as possible as well as filtering for suitable candidates. Opportunities abound for successful investing, taking sustainability into special consideration. For example, companies that place emphasis on good corporate governance tend in general to be the leaders in their sector. Studies of corporations (including “Establishing Long-Term Value and Performance”, DB Climate Change Advisors, June 2012) have shown that a positive correlation exists between exemplary ESG management, lower capital costs and positive financial performance.

Daniel Bruderer is Head of Relationship Management Global Themes at Vontobel Asset Management.

Foundations: clarify needs first, then invest A foundation’s assets serve mainly to preserve its endowment and are invested accordingly. If this money is invested in socially and environmentally sustainable companies and projects, foundations can achieve significant impacts.

What does this mean for foundations that aspire “to do good things which have a lasting effect”? First of all, clarity about the values and financial goals of the organization is a must. “Feeling good” (i.e. investing in line with personal values), “doing good” (i.e. achieving something positive with money), or “doing well” (i.e. avoiding risks and seizing opportunities) may be useful concepts to bear in mind when defining objectives. This third point is particularly important in terms of risk minimization. Of course, it is also important to be aware of potential conflicts between financial expectations and sustainability objectives.

So this is how the “right” investment products come into focus, because even charitable institutions want to achieve a satisfactory return. With over twelve years’ experience in the field of sustainable investments, and as a signatory to the UN PRI, Bank Vontobel set as an objective to support foundations that wish to implement a sustainable investment strategy. An important aspect of this is showing how sustainability can be integrated into the asset management or the portfolio of a foundation. Among other options, Bank Vontobel offers its clients tailor-made sustainable “Multi Asset Class” solutions – products that invest in different asset classes that are tailored to the individual needs of a foundation. Sustainable funds and

thematic funds – the latter usually ESG-related – are also part of the offer.

On the way to sustainable portfolios In existence since 2012, the sustainable “Multi Asset Class” products are based on the so-called asset allocation, i.e. the allocation of funds among different asset classes by a team of Vontobel investment professionals.

In selecting individual securities, our managers call upon a mix of sustainable products found on the recommendation lists compiled by internal specialists. In the case of equities and corporate bonds, for example, a key criterion is the ability of a company to achieve consistent above-average cash flows whilst remaining an industry leader over a span of several years. In the area of government bonds, we attach great importance to whether the county has a good credit rating and whether it is able to generate sustainable long-term growth.

Vontobel blue Theme 21

By Roberto Faoro, Head of Special Clients, Private Bank

Theme: Competence

The professionalisation of foundations Originally, the motivation behind the establishment of a foundation was religious, for the most part. The purpose of such a foundation, for example, was to establish a monastery or build a church, such as the Collegiate Church of St. Gallen. Soon, charitable foundations came into being to build hospitals, orphanages and educational institutions.

One of the first foundations established by an individual person may indeed be the original example of social housing: The so-called Fuggerei in the German city of Augsburg was founded in 1521 by Jakob Fugger – and to this day it still provides accommodation to 140 of the town’s needy Catholic citizens, who each pay it an annual rent of just 0.88 Euros. For almost 500 years, this foundation has been funded almost exclusively Swiss Foundation Code: Principles Interaction The highest standard for all foundation activities is based on three sole principles. These principals are essential and indispensable for ensuring best foundation practices and interact in a reciprocal manner: a foundation whose activities (grant-making, mentoring and advocacy) do not consistently and concurrently adhere to all three principles does not fulfill the requirements placed on modern foundation management.

• Effective Implementation of the Foundation’s Purpose A foundation is obligated to achieve its purpose, as established by its founder, in the most efficient and effective manner possible.

• Checks and Balances Using appropriate organizational procedures, a foundation ensures sound leadership and monitoring of that leadership in all its main operations and decisions.

• Transparency In keeping with its purpose, a foundation fosters the highest degree of transparency possible regarding its principles, goals, structures and activities.

Further information www.swissfoundations.ch

22 Vontobel blue Theme

from its own principal. The same humanitarian and social issues that moved the original benefactors to establish a foundation still motivate the majority of their counterparts today.

Not only have the purposes of most foundations remained similar to the present day, but so has the goal of structuring them so they will remain sustainable over the long term and, if possible, carry on motivating others to support them. In today's environment, this objective has become a challenge – one which makes the professionalisation of foundations a must. Guidance in this area comes from SwissFoundations, the Association of Swiss Grant-Making Foundations. This association has formulated Europe's first code for grant-making foundations, the Swiss Foundation Code, which sets out 3 principles and 26 recommendations for the creation and management of grant-making foundations (see box).

The starting point for all the activities of a Foundation is the objective of its founder. This should be defined so that the trustees have a clear mission and at the same time have enough leeway to react to social and economic changes for the benefit of the foundation. Usually, the founder has a specific concern that he wants to pursue through the targeted application of financial resources, rather than through a broad distribution of funds, as is often the case with large institutions and government programmes. But to achieve its goals, not every foundation is designed to exist for an indefinite period. Many benefactors establish a so-called “principal-depleting foundation”, which aims to fulfil the foundation’s objective within a pre-determined period of time and in doing so, depletes its capital endowment. This type of foundation is especially popular when the founder wants to be personally involved in the implementation of the foundation’s objective himself.

Challenges of investing Especially when it comes to managing the endowment, the requirements have increased – and so has the complexity involved.

Photo: PB, St. Gallen-Bodensee

Picture: Getty Images

In 1983, the Collegiate Church in St. Gallen was added to UNESCO’s list of World Heritage sites, recognising it as a cultural treasure.

As before, the endowment in most cases is meant to be protected over the long term, generating income which provides the funds used to meet the foundation's purpose. To ensure this, the requirements demanded of the partners of the foundation have grown, as investment decisions become more closely linked to the needs and objectives of the foundation. If possible, investments should support the foundation's purpose – or at least not run counter to it. Thus, foundations often define ethical standards which are to be considered when making investment decisions.

But the effort required to monitor and ensure the application of these standards should not be underestimated. Long-standing experience in sustainable investing is therefore vital. This is what enables the bank to meet the foundation’s individual investment needs.

Increased reporting demands It is not only as investors that foundations occupy a special position. Since they have no members or shareholders, to a certain extent they belong to themselves. By virtue of their social engagement, they assume a degree of social responsibility, complementing government-run programmes. In turn, the government rewards this activity by offering foundations a tax break. But having been put in this particular position, foundations can find themselves subject to increased public scrutiny. Without fail, critics will be quick to arrive on the scene and question the foundation’s good intentions – something that happens not only to large foundations such as the Bill and Melinda Gates Foundation.

For all these reasons, the board of trustees should endeavour to ensure that there is a good balance between management

Between 1495 and 1525, Jakob Fugger, founder of Augsburg’s Fuggerei, was one of Europe’s most important merchants, bankers and owners of mining operations.

and control when it comes to all of the foundation’s important processes and decisions. It is clearly in its own best interest to make certain that there is not only internal transparency, but also an appropriate degree of external transparency as well. In this regard, a foundation is well served by experts that can provide comprehensive, high-quality reporting and support.

The desire to make a difference – perhaps to give something back to society – is often what is behind the idea of establishing a foundation. However, the requirements for establishing and managing a foundation have changed significantly. The increased effort required is leading to more professional boards of trustees and more specialised service providers. Excellent cooperation between the two is now the prerequisite for a successful foundation.

Vontobel blue Theme 23

by Artur Kampik, Head of Wealth Management Solutions Germany

Theme: Competence

German foundations in need: In search of security and return The world is currently changing at a breathtaking pace. Foundations are affected by these changes in several ways: On the one hand, within an evolving society, their significance is increasing by leaps and bounds, as governments withdraw more and more from delivering social and public services and leave private initiatives to take up the slack. On the other hand, the need is increasing to adjust investment policies to the changed market environment. In addition to preserving their principal over the long term, German nonprofit, charitable or religious foundations must also achieve reasonable and consistent returns in order to finance their activities. Given the current changes on the capital markets, this places increased demands on a foundation’s asset management.

The last golden age of investment influenced a whole generation of investors. It started in the early 1980s with the successful triumph over inflation in the Western economic system. The next 25 years were marked by economic stability, artificially shortened periods of recession, and globalisation. As a result, with equities, real estate and bonds, investors could earn positive returns that were well above the inflation rate. Foundations also benefited in this period. Their annuity-heavy portfolios generated sufficient income, because on the one hand, the real interest earned, i.e. after adjusting for inflation, was positive. On the other hand, interest rates since the early 1980s have steadily declined, whilst the prices of fixed-income securities have increased accordingly.

Difficult market environment With the bursting of the housing bubble in the United States, the bankruptcy of the investment bank Lehman Brothers, and the Euro crisis, this era has come to an abrupt end. Today, the markets are still struggling with the side effects and long-term consequences of these events, as well as the systemic and political risks that have arisen. Whilst some countries, barely able to refinance, were bailed out, investors are fleeing to safe haven investments such as US, Swiss or German government bonds, which are producing historically low secondary market returns.

This is surely not a permanent condition, and some trends seem to confirm this. These include the global power shift towards emerging markets, and its corresponding effect on the stock markets; a new world order in currencies; and very low real interest rates in certain industrialised countries. A buy-and-hold strategy no longer works. So for all the reasons stated above, 24 Vontobel blue Macro

Artur Kampik is Head of Wealth Management Solutions Germany at Vontobel Europe AG, Munich.

foundations in particular are dependent now on new, innovative concepts.

In working with foundations in Germany, we have seen that many boards of trustees are faced with these problems. To sum it all up, if they are to be able to distribute the funds needed to fulfil their purpose – and at the same time preserve their inflation-adjusted capital – they need to achieve returns that cannot be generated with low-risk investments. But often, their investment guidelines prescribe exclusively risk-averse or safety-orientated investment instruments. Taken together, these factors mean that in the current environment, foundations are no longer able to achieve their investment goals.

Accepting a challenge Thanks to the statutory framework in which foundations must operate, they need a customised solution. In the prevailing market conditions, a foundation's portfolio should be based on three core elements. The first is a global perspective, allowing out-ofthe-box possibilities compared to conventional asset classes such as German bonds or European equities. Including investments from emerging markets, or alternative investments such as real estate, managed futures strategies or microfinance, means exploiting new opportunities for generating returns and spread-

25

Schleswig-Holstein Mecklenburg-Vorpommern

9

Hamburg

48 70 Bremen

22 Berlin

Niedersachsen

26

Brandenburg

11

21

Sachsen

11

Thüringen Hessen

Rheinland-Pfalz

23

7

Sachsen-Anhalt

Nordrhein-Westfalen

29

12

16

Saarland

Bayern

28

Foundations by the numbers: 2011 Foundations per 100,000 inhabitants in Germany.

Source: Bundesverband Deutscher Stiftungen

Baden-Württemberg

27

ing risks wider. Second, active management takes advantage of opportunities and responds flexibly to changes in the market environment. Especially in turbulent market phases, large losses can be avoided thanks to dynamic risk management. The third core element focuses on investment instruments producing a generous cash flow. As a supplement to bonds, high-dividend shares or funds with a high payout yield are selected.

This element is particularly important, as normally, under German law a foundation may not touch its principal and must generate the liquidity it needs to fund ongoing projects from such payouts.

ments. For example, an experienced asset manager can also advise the Board of Trustees in the preparation and adaptation of its investment guidelines. This point is important, because the Board of Trustees may be held personally liable for breaches of a foundation’s investment guidelines. Furthermore, when it comes to identifying the right investment strategy and the appropriate risk profile for the foundation, its entire balance sheet – not just its liquid assets – should be taken into consideration. In this context, elements of financial planning can help simulate how its liquidity might develop in the future – very important for foundations. In sum: in the current market environment, investing a foundation’s capital requires innovative concepts – and a passion for its needs.

“Thanks to the statutory framework in which foundations must operate, they need a customised solution.”

The degree of collaboration that is possible with foundations can go well beyond the ‘classic’ level of investing their endow-

Vontobel blue Macro 25

Blue pages:

News from the Vontobel Group.

13

Vontobel wins double TOP Service recognition at the Swiss Bank Vontobel Derivative Awards In April 2013, the prestigious “Oscar night” of the derivatives industry was held for the eighth time. For the third year in a row, the jury gave Vontobel the top honours for outstanding performance in the category “Top Investor Service.” Added to this was the award for “Best Market Maker Leveraged Products”. The decisive factor that brought home the gold for Vontobel was our consistently excellent quality in the pricing of leveraged products in the secondary market issues at the Scoach Switzerland.

You can read more about these awards at www.derinet.ch/Awards Generational change in the leadership at Vontobel Geneva Vontobel has been present in the financial centre of Geneva and the French-speaking part of Switzerland since 1993, very successfully looking after private and institutional clients in both Switzerland as well as selected target markets outside the

country. In the summer of 2013, a generational change will take place in the management of the local branch. Lionel Pilloud will take over as head of the office, as Jean-Pierre de Glutz enters into a well-earned retirement. The 43-year-old Pilloud comes from within our own ranks, heading the French-Swiss advisory business in the area of Financial Products during the last 12 years.

The Geneva branch will now also serve as a central hub for the Middle East in particular, thus becoming an even more important centre of activity for the bank.

D'hooge enhancing Vontobel’s know-how in emerging market bonds Luc D'hooge is reinforcing Vontobel's expertise in local and hard currency emerging market bonds. The investment expert, newly named head of the "Portfolio Management Emerging Markets Fixed Income" team at Vontobel Asset Management, has been recognised several times by Citywire for his performance in the area of emerging market bonds. Previously, Luc D’hooge worked from 2000 to 2012 at Dexia Asset Management.

Photo: Getty Images

Vontobel appoints Jean-Pierre Stillhart to Head of Private Banking Switzerland Vontobel’s new head of Private Banking Switzerland, based in Zurich, will be Jean-Pierre Stillhart. The 46-year-old banker can look back on many years of professional experience in the business of looking after high net worth individuals. Previously heading the Swiss private banking business of the renowned private bank Rothschild, and with a career that includes positions of responsibility at Zurich Cantonal Bank and UBS, he brings to Vontobel an exceptional track record.

26 Vontobel blue Blue pages

US portfolio manager wins coveted award Rajiv Jain, head of portfolio management at Vontobel Asset Management, Inc. (“VAMUS”) in New York, has just received an honour in Europe: Morningstar has named him “Global Equity Fund Manager of the Year”. Not only was Rajiv Jain’s 2012 performance singled out for the award, but also his ability to generate superior risk-adjusted returns over the long term. The central focus of his investment process is the identification of companies with an attractive business model, strong competitive position, and reliable, above-average earnings growth. He manages his portfolio independently of seasonal market trends and is also willing to deviate significantly from the benchmark.

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