The Alchemy of Water and Wealth on Lake Geneva

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Wind, water, and generations meet on Lake Geneva for the Bol d’Or Mirabaud, the world’s most prestigious freshwater sailing race. Two members of the Mirabaud family met with finews.com to discuss sailing, wealth management, and generational thinking.

It is an impressive sight for almost any sailing enthusiast. Over 500 sailboats are gathered, from day sailors to high-tech carbon fiber tri-foils, to contest the 83rd edition of the prestigious Bol d’Or Mirabaud regatta whose participants, past and present, include sailing legends. 

While Mirabaud was founded just over 200 years ago, it became the event’s main sponsor in 2007 because «we had two partners who were true sailing fanatics,» says senior managing partner Yves Mirabaud (pictured below).

Although he concedes he prefers to play golf, «water sports and sailing really have a strong link to the Mirabaud family from its start so that the sponsorship angle makes total sense. Water is even embedded in our logo,» he says. 

(Yves Mirabaud. Image: Loris von Siebenthal)

Changing Market Winds

Last year, Mirabaud’s assets under management (AuM) grew to 38.9 billion Swiss francs ($42.6 billion). That amount could be under pressure from myriad developments since then, among them rising interest rates from central banks to combat inflation, and volatile financial markets. In what could be a storm warning for the rest of the industry, earlier this week Zurich-based Bellevue group announced that due to market turmoil it expects its AuM base to contract by 15 to 20 percent compared to last year.

Although higher interest rates won’t bolster current markets, it’s more healthy for the bank to have positive rather than negative interest rates from central banks. «There is a huge hidden value if rates go to two, two and a half percent. But on the other side, higher rates have, as we can see, a negative impact on market valuation,» says Yves.

Given that, he is likely to welcome today’s decision by the Swiss National Bank to increase its benchmark interest rate. The SNB also will adjust the threshold factor used to calculate the level of banks’ sight deposits that are exempt from interest rates, ensuring that secured short-term Swiss franc money market rates are close to the SNB policy rate. 

To be sure, the firm depends a lot on the market behavior, the economy, numbers, and company results as things that need to be analyzed the way «a sailor has to analyze the wind and the way the waves progress as fast as possible,» says Yves but goes on to stress that «we really think long-term. I like to say that contrary to those who think in terms of a quarter, we think in terms of generations.»

Passing the Torch

Another generational aspect was on display at the regatta. The winning boat was skippered by Christian Wahl, who won the event for the record eighth time with his «w-team», surpassing another sailing legend Ernesto Bertarelli of «Alinghi» fame. Wahl’s crew consisted of young sailing talents from the region who will no doubt benefit from Wahl passing down his sailing expertise to them. One of the crew was Nelson Mettraux, sister of Justine Mettraux who is currently preparing to contest the Vendée Globe in 2024.

Geneva-ness

Geneva is very much entwined with the Bol d’Or, which is hosted by Société Nautique de Gèneve (SNG) and is something also important to Mirabaud as a firm, even outside of the city.

«If you are from Geneva and go to Zurich and say we are going to do the things exactly like in Geneva, you’re going to fail, but you have to make sure you keep your values and DNA,» Nicolas Mirabaud (pictured below), managing partner and head of private banking explains.

 

(Nicolas Mirabaud. Image: Loris von Siebenthal)

Since joining the firm more than 20 years ago, the company has expanded into other markets and now has offices in 10 different countries, and Nicolas says it is his job «to make sure that we adapt to the local business.»

Does Size Matter

When he joined, the firm had 4 billion Swiss francs in assets under management, rising to its current level of around 40 billion. By contrast, UBS and Credit Suisse had 3.1 trillion and 1.6 trillion francs under management at the end of last year. So is 40 billion enough to be a viable player?

«It’s not a matter of having 30, 40, or 200 billion. It depends on the quality of the assets that you have, and making sure they are enough to generate sustainable revenues to invest in the business, remain competitive, and expand,» he says, and «as long as you have a sustainable business you have the right size,» he says.

And the bulk of that business is wealth management. «This is what we do – together with asset management and corporate advisory (including M&A for our clients) -, we’ll never be an investment bank,» explains Yves.

Elite Student Sailor

While wealth management is very much part and parcel of Mirabaud, time management is very much on the mind of student-sailor Anaëlle Pattusch, who is being sponsored by Mirabaud to take part in a solo transatlantic sailing race, the Mini-Transat, as finews.com wrote about earlier this year. She told us that her preparations are going well as she prepares herself for a series of qualifying events, including this year’s edition of the Bol d’Or.

Even with her busy sailing schedule over the racing weekend which included studying for the last round of her exams, she took the time to introduce us to «Flash,» the mascot and namesake of her boat Flash le 1042.

(Anaëlle Pattusch with Flash. Image: Marco Babic, Finews.com)

In addition to Pattusch, Mirabaud is sponsoring a sailing team of four young women called «The Sailing Squad» who, in another example of passing knowledge to the next generation, are being mentored by two-time Olympic Champion Shirley Robertson.

Only around ten percent of elite-level sailors are women, «very little has changed in our sport» Robertson says.  In 2022, to only occasionally have one female among 20 elite-level boat crew members «wouldn’t be acceptable in business,» she says. 

Mirabaud, which has a female executive committee chair in Camille Vial,  supports the all-female sailing team, as it is important to «promote the best. So if it’s a woman, great! If it’s a man great!» Yves says, adding that it is also good to have women in high-level meetings to provide a different perspective.

Not Only Elite Sailors 

The Bol d’Or isn’t just for elite-level sailors, but also for other enthusiasts such as Markus Krucker, who traded a career in IT  to become the owner of a boating school in Zurich, as finews.com wrote. The race has two different starting lines. One for the super fast sailboats, and another some way behind for the rest of the fleet so as not to hinder those boats that can «fly.»

Financial institutions are currently spending vast sums on IT projects, and Mirabaud is no exception. «We have decided to invest massively in IT. It’s a big project for us, and we have the resources to do that,» says Nicolas.

The money flowing into IT projects isn’t likely to lure Krucker, participating in his first Bol d’Or, back into the IT world, however. He will be back for another edition of the race which he said was a «fantastic spectacle» with a magnificent host in the SNG, he told finews.com.

Democratization of Alternative Investing

We also turned to the subject of making alternative investments available to a wider group of investors and democratization of alternative assets. At least two schools of thought are evident here. 

One view is that such investments can and should be open to a wider range of individuals. This is a position supported by iCapital CEO Lawrence Calcano who says this can be achieved responsibly by educating investors, as he told finews.com in May.

This democratization process is already underway, but «hopefully not too much. Private Equity is not dedicated to all types of investors. The level of risk is high and the liquidity is very low,» Yves explains.

Nicolas agrees that it is not for everybody and requires a diversified portfolio, liquidity, and a long-term perspective. «Private equity is for people who can commit for seven or 10 years with a high-risk tolerance,» he says.

But as the Bol d’Or Mirabaud shows, both worlds can share the same pool of water, if not wealth. 

 

 

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