Portrait LGT

Portrait
Stanislaus Figenschuh, Hortus Botanicus, detail from “Aesculus hippocastanum L. and Castanea sativa L.,” ca. 1803
A look inside the Princely Collections: The illustrations in this publication are part of the Codex Liechtenstein –
in the Codex’s more than 2700 separate plant illustrations, the Bauer brothers created a synthesis of art and
science: faithful in detail, yet obeying the high aesthetic requirements of art.
For more than 400 years, the Princes of Liechtenstein have
to accompany what we do. For us, they embody those
been passionate art collectors. The Princely Collections
values that form the basis for a successful partnership
include key works of European art stretching over five
with our clients: a long-term focus, skill and reliability.
centuries and are now among the world’s major private
art collections. The notion of promoting fine arts for the
Cover image: Bauer brothers, Hortus Botanicus,
general good enjoyed its greatest popularity during the
detail from “Passiflora caerulea L.,” ca. 1779
Baroque period. The House of Liechtenstein has pursued
© LIECHTENSTEIN. The Princely Collections, Vaduz–Vienna
this ideal consistently down the generations. We make
deliberate use of the works of art in the Princely Collections
www.liechtensteincollections.at
Contents
5
We look forward to meeting you
6
Our company at a glance
8
Interview: “We are marathon runners”
10
Our understanding of private banking
14
Our unique investment expertise
17
How we practice sustainability
20
Foundation Board and Group Management
25
Data and facts
32
Risk note/Disclaimer
“Focus, continuity and our
global perspective have
helped us to continually refine
our investment expertise.”
H.S.H. Prince Max von und zu Liechtenstein, CEO LGT
5
We look forward
to meeting you
Dear Client
Welcome to LGT, the Private Banking and Asset Management
Group of the Princely House of Liechtenstein. Entrepreneurial
spirit and long-term thinking and action, coupled with the
aspiration to pass on our achievements to the next generation,
have been the hallmarks of our family’s dedication for almost
900 years.
Today, a considerable share of our liquid investment capital
is managed by LGT. We believe that it is important that LGT
invests and administers our portfolio with a high degree of
both expertise and discipline. We invite you to benefit from
the same expertise and investment strategies as are used for
the management of our family’s assets. Co-investment by the
Princely Family alongside our clients and employees means
that interests are naturally aligned.
For our family, the successful accumulation of assets has never
been an end in itself. The financial independence that this brings
provides us with the opportunity to achieve broader objectives.
LGT would like to use its commitment and expertise in helping
you to fulfill your own individual goals. We look forward to
meeting you.
H.S.H. Prince Philipp von und zu Liechtenstein (left) and
H.S.H. Prince Max von und zu Liechtenstein (right)
H.S.H. Prince Philipp von und zu Liechtenstein
Chairman LGT
H.S.H. Prince Max von und zu Liechtenstein
CEO LGT
6 Brief overview
Our company
at a glance
LGT is the largest Private Banking and Asset
Management Group in the world that is
wholly owned by an entrepreneurial family.
Holistic perspective
As a company and an investor, we take a long-term and holistic
approach and are actively involved at various levels in promoting
the sustainable development of our society and environment.
In the areas of philanthropy and impact investing too, we seek
For more than 80 years, our company has been owned by
dialogue and joint engagement with like-minded clients.
the Princely House of Liechtenstein, which is also one of
our biggest clients. The values and beliefs which have been
handed down by the owner family over generations, together
LGT Group: financial highlights as at 31 December 2015
with the expertise that we have accumulated as its family
Assets under administration
CHF million
132 236
office, are also incorporated into our investment approach
Total assets
CHF million
34 239
for private and institutional clients.
Equity capital
CHF million
3 314
Total operating income
CHF million
1 149
Investment expertise dedicated to serving our clients
Group profit
CHF million
We combine an in-depth perspective of our clients’ require-
Headcount
ments with an active approach in the area of portfolio manage-
Moody’s/Standard & Poor’s ratings
for LGT Bank Ltd., Vaduz
ment. In order to identify and implement attractive investment
ideas, we have a specifically structured and well-coordinated
investment organization, which is active in all of the world’s
key investment and financial centers. When it comes to struc-
Our range of services
turing and managing assets, our clients benefit from the
specialist know-how of our investment experts in traditional
n
Investment advisory
n
Portfolio management
n
Securities and foreign-exchange trading
n
Financing and loans
n
Wealth planning
n
Philanthropy and impact investing
and alternative investments as well as from our expertise in
constructing portfolios and selecting leading external fund
managers.
211
2 212
Aa2 /A+
7
International presence
Europe
Principality of Liechtenstein, Vaduz
AsiaChina, Beijing
Austria, Salzburg, Vienna
Hong Kong
Ireland, Dublin
Japan, Tokyo
Switzerland, Basel, Berne, Chur,
Singapore
Davos, Geneva, Lugano, Pfäffikon,
Zurich
AustraliaSydney
United Kingdom, London
Middle East Bahrain, Manama
America
United States, New York
A complete address list of all LGT locations can be seen at www.lgt.com
United Arab Emirates, Dubai
8 Interview
“We are marathon runners”
Why LGT can look to the future with confidence, despite a challenging environment.
Your Serene Highnesses, financial wisdom has it that
skillfully diversified over centuries is one of the primary reasons
if you want to accumulate assets as a business owner,
why they have remained preserved, although a certain pro-
you need to pool them, whereas if you want to preserve
portion of one’s wealth is always lost as a result of political
assets as an investor, you should diversify them. Given
or economic upheaval. Today, our approach is twofold: on
these conflicting priorities, where does the Princely
the one hand, we are focused business owners who quite
Family stand?
consciously take concentrated risks in certain areas; on the
H.S.H. Prince Philipp: During the accumulation and growth
other hand, we endeavor to ensure that our assets are well
phase, a business owner must focus all of his resources on
diversified and that sufficient liquidity is available.
his company. Once he has managed to do this successfully
and begins generating surplus funds, he may want to use
Your family has owned LGT for more than 80 years.
them to set up a new company or invest part of them in the
As private banking consolidates, the model of privately
financial markets. Our family has decided to do both of these
owned banks appears to be coming under pressure.
things: over the course of generations, we have built up a
Is going public a conceivable option for LGT?
well-diversified company portfolio, we invest in private equity
H.S.H. Prince Max: No, our private structure has too many
in our capacity as business owners, and, finally, we invest
benefits: we have rapid decision-making channels, stability
substantial funds in the international financial markets.
in our management structure and continuity in terms of our
H.S.H. Prince Max: It’s typical for investors to want to
strategic focus. I don’t see any need to change anything
diversify as their assets grow, an approach which we believe
here. We are extremely well capitalized and our family is a
is very sensible. The fact that our family assets have been
financially solid owner, which could invest further funds if
necessary. The traditional reasons for going public do not
apply in our case.
“Over the course of generations, we
have built up a well-diversified company
portfolio.”
H.S.H. Prince Philipp von und zu Liechtenstein
H.S.H. Prince Philipp: As a general rule, external shareholders have two objectives, i.e. high dividends and a rising
share price. In most cases, this mindset creates a focus on
the short term. However, as a family, we can think and act
in a long-term manner. Let me give you an example: During
the Asian crisis at the end of the 1990s, many banks scaled
back their activities in the region. We, on the other hand,
said: “Now more than ever!” and expanded our Asian
business further. Today, this decision is benefiting us greatly.
H.S.H. Prince Philipp von und zu Liechtenstein,
Chairman of LGT since 1990.
And this is why I always say that we are not sprinters, but
marathon runners.
9
To what extent is the private ownership of LGT
owners. This means that both parties are in the same
also important for your clients?
boat and share an interest in terms of good performance.
H.S.H. Prince Max: Besides stability and security, our clients
At LGT, we have assimilated this principle. As a bank, we
also expect excellent service and a positive investment
grant portfolio management mandates to external fund
performance, of course. Many clients rightly regard the
managers in a range of different asset classes and invest-
ownership structure, which has remained unchanged for
ment instruments. We too would never consider using a
more than 80 years, as an important basis for our consistent
fund manager who didn’t invest a substantial share of his
strategic focus and our corporate success. In the fast-paced
private assets into his own strategy.
business of banking, in particular, which is full of short-term
Traditional private banking is undergoing a shake-up,
while the economy and financial markets are experiencing a historically difficult period. What is the
outlook for LGT?
H.S.H. Prince Philipp: I am, of course, concerned by
global political developments, the numerous conflicts and
the refugee crisis, by environmental issues, many countries’
excessive debt levels which are far from being resolved,
and by towering monetary inflation. However, it is also
true that the present situation provides many opportunities
for a healthy company. Tough times separate the wheat
from the chaff.
H.S.H. Prince Max: On the one hand, I’m very optimistic
about the future. It is becoming increasingly clear that, as a
company, we are very well positioned in every respect. We
have emerged from the financial crisis stronger and have
strengthened our competitive position. Nevertheless, the
problem areas mentioned involve risks and dangers and are
resulting in dangerous and unwelcome developments for
society. Recognizing this, we believe that it’s important not
only to seek short-term financial success but also to think
and act in a more holistic manner so that, at a corporate
level as well, we can combat negative social and environmental trends. H.S.H. Prince Max von und zu Liechtenstein, CEO of LGT since 2006.
temptations, a stable ownership structure with a long-term
The Princely House of Liechtenstein
focus is a major advantage. Many clients have a keen interest
The line of descent of the Princely Family of Liechtenstein began
in understanding the particular design of our ownership
with Heinrich I of Liechtenstein (1216–1265), who obtained
structure. In contrast with other private companies, the rela-
the Lordship of Nikolsburg in South Moravia as free property
tionships at LGT are remarkably straightforward. All shares
from King Ottokar of Bohemia. In 1699, Prince Johann Adam I
are held in a foundation, the purpose of which is not limited
in terms of time. Our clients also often tell us how they
acquired the Lordship of Schellenberg, followed by the county
of Vaduz in 1712. In 1719, the territories were united and raised
to the rank of the Imperial Principality of Liechtenstein. Today,
appreciate the clear family profile, which has been developed
the Principality of Liechtenstein is a constitutional monarchy
over generations and which we can hopefully continue to
and sovereign state at the heart of Europe. As the head of the
good effect.
Princely Family and also the head of state, the reigning prince
H.S.H. Prince Philipp: I would like to highlight, in particular,
the aspect of common interests between owners and clients.
For a private bank, it’s fairly unique that clients can invest
in the same investment strategies and solutions as the
exercises sovereign authority together with the people. The
Princely Family plays an active political role and has numerous
business activities. It is a keen advocate of art and science and
champions welfare. www.fuerstenhaus.li
10 Private Banking
Our understanding
of private banking
The individual requirements and
long-term financial goals of our clients
are our core focus.
and our advisory approach are therefore geared to the long
term. Experience shows that the best opportunities for investors
often occur during periods of challenging market conditions
and that planning over several cycles and a longer period of
time pays off.
As the family office of the Princely Family of Liechtenstein, LGT
looks back on many years of experience in the management of
Our relationship managers spend a considerable amount of
sizeable sums of assets. Individual wealth strategies, which we
time in order to gain a precise understanding of each client’s
develop together with our clients, are based on the understanding
personal circumstances, their financial goals as well as their
we have acquired over a number of different economic cycles.
individual risk profile and investment horizon. We firmly believe
that the time and effort we spend doing this represents a
Long-term focus
necessary investment which reaps rewards in the long term.
We have been managing many of our clients for several gen-
This provides the foundation on which our investment specialists
erations. We understand that accumulating assets requires a
are able to draw up a tailor-made solution, implement it in an
structured approach, time and discipline. Our business strategy
efficient manner and, finally, review it on an ongoing basis.
We listen intently to our clients before helping them to develop their individual wealth strategy.
11
Viewing assets in comprehensive terms
Guidepost toward investment objectives
Whenever we implement a tailored solution together with a
client, we draw on the whole range of traditional and alternative investments so as to ensure that we are ideally positioned
during all market phases. In so doing, we pursue a best-in-class
approach by selecting the best investment managers and solu-
Continual
review
In-depth
analysis
tions for each investment segment.
LGT always takes a comprehensive look at an asset. We also
assist our clients with financial planning and offer them a
range of financing solutions tailored to their individual financial situation.
Customized
implementation
Client
Appropriate
strategy
Individual
solution
Our clearly structured advisory approach combines the expertise of our
relationship managers with the know-how of our investment and portfolio specialists in the form of a clearly defined process. This ensures that
our clients are given the best possible advice at all stages.
Top ratings
In 2015, LGT was once again recognized by a number of independent
bodies as a leading international private bank. We were awarded a
“summa cum laude” rating – the highest possible accolade – for the
13 th consecutive year by the Handelsblatt Elite Report, which also
designated LGT as the leading private bank in Liechtenstein. We also
received a “wholly commended” rating from the prestigious Fuchsbriefe, which designated us as the best provider in Liechtenstein.
According to Fuchsbriefe, LGT makes a solid, reliable impression. The
relationship managers impress through their ability to listen attentively,
their clear communication, their expertise both in investment and
tax matters, and their ability to accurately identify the fundamental
aspects of the defined objectives and develop approaches by which
to achieve these. Finally, the Financial Times publications Professional
Wealth Management and The Banker also recognized LGT as the best
private bank in Liechtenstein and designated us as “highly commended”
in the sustainable investment category.
12
LGT works together with leading external asset
managers to manage the individual components
that make up the Princely Portfolio. The traditional
Manager Review Meeting is held every year at
Schloss Freudenfels on Lake Constance just as
spring is getting under way. Over the course of
a week, some 50 external asset managers report
on their mandates to decision-makers at LGT and
representatives of the Princely Family and explain
their strategy to clients and other interested parties.
Common interests
At LGT, clients, owners and employees are all in the same boat.
New York City, Friday, May 29, 1998, early morning at
tion of leading fund managers. However, the Princely Port-
3:00 a.m.: Following protracted negotiations, an agree-
folio is also synonymous with another special feature of LGT
ment was finally reached: LGT (then Liechtenstein Global
in the area of private banking, i.e. the possibility for clients
Trust) sold its asset management subsidiary GT Manage-
to invest in the same solutions as the owners. Based on the
ment to an investment company for the sum of just under
conviction that long-term economic success is only possible
one billion US dollars. Following the successful conclusion
if the interests of owners and clients are aligned as closely
of the transaction, the question that quickly arose was
as possible, the Princely Family opened up this innovative
what should be done with this sum of money. “On the
investment strategy to LGT clients about a year after it was
basis of our family statutes, it was clear from the outset
set up. In addition to granting private investors access to
that we would not take the proceeds from the sale out of
the world’s leading portfolio managers, it also provides
the bank and distribute them, as may have been the case
them with the opportunity to invest in alternative invest-
at another family-owned company,” says H.S.H. Prince
ments with a relatively small amount of capital. From the
Philipp, Chairman of LGT. Instead, the capital remained
start, the Princely Family attached considerable importance
in the bank and formed the basis for setting up what is
to the fact that those employees entrusted with the man-
known as the Princely Portfolio. The design of this port-
agement of the portfolio invested their own money in the
folio resembled that of the endowment funds of major
strategy as well. “We refer to this as ‘co-investment’ and
US universities: invested worldwide, broadly diversified and
all it means is that our clients, our family and our employees
with a very long-term investment horizon. In particular, the
are all in the same boat and have a common interest in
broad diversification also meant that around 40 percent of
ensuring that investments perform as well as possible,”
the capital was placed in alternative investments, primarily
says H.S.H. Prince Philipp, explaining the philosophy behind
hedge funds and private equity.
this approach. “It also means that any new investment
solutions that are developed are first tested using our own
Co-investment with clients
money before we make them available to our clients.” LGT
The Princely Portfolio, the design of which is geared to the
also demands the same of all external portfolio managers
long term, has proved to be very effective over the past
it works with. For an external portfolio manager to stand
18 years. It has enabled LGT to develop a unique level of
any chance of being given a mandate, he must have invested
expertise both in alternative investments and in the selec-
a substantial proportion of his own assets in his strategy.
“For a private bank, it is fairly
unique that clients can invest in
the same investment strategies
and solutions as the owners.”
H.S.H. Prince Philipp von und zu Liechtenstein, Chairman LGT
14 Asset Management
Our unique
investment expertise
The appeal of LGT to private clients and
institutional investors is based to a large
extent on our expertise in the field of asset
management.
an active investor, our focus is geared, wherever possible, to
undervalued investments and excellent markets. Identifying
these investments requires highly developed analytical skills
and an in-depth knowledge of the markets.
Selecting leading portfolio managers
LGT has around 350 asset management specialists who have
Besides the careful selection and diversification of asset and risk
established leading positions, primarily in the area of alternative
classes, the question facing any investor is how they should
investments and in the construction of diversified portfolios
manage the individual asset classes. Unlike many competitors,
for institutional investors. More than 400 pension funds, insur-
LGT selects fund managers for each sector who in the past have
ance companies, sovereign wealth funds and foundations from
demonstrated the ability to generate value added, net of all
all over the world, as well as our owner, the Princely Family
charges and adjusted for risk, irrespective of whether they work
of Liechtenstein, have entrusted us with the management of
externally or are an internal employee of our company. Over
substantial sums of assets. In addition to these parties, our
a period stretching back almost 20 years, we have developed
private clients also benefit from our specialist investment skills.
a considerable global network with investment managers for
This expertise, which we have been accumulating since 1998,
alternative and traditional asset classes and honed our ability
is unparalleled in terms of its breadth, depth and its setup.
to identify from these managers the very best individuals from
around the world and to work together with them.
Strategic investment
The basis for our asset management activities is always an
investment strategy that is geared to the long term. When
developing such strategies, we place a major emphasis on
ensuring that risks are diversified after having been given
thorough consideration. One of the tools used by our experts
in this regard is scenario analysis. This enables them to develop
“robust” portfolios for different market trends. We then adapt
Outstanding investment expertise
each portfolio specifically to the requirements, investment
LGT regularly wins awards from independent bodies for its investment
horizon and risk appetite of individual investors.
expertise. In 2015, for example, we received the following awards:
“Best Private Equity Provider for Pension Funds” at the European Pensions
Active advisory approach
It is our firm belief that outstanding investment skills are
reflected in above-average results over the long term. As
Awards; “SRI/ESG (Socially Responsible Investment/Environmental,
Social and Governance) Provider of the Year” at the UK Pensions Awards;
and “Private Equity Fund Manager of the Year” at the Triple A Awards
presented by Asset Asia.
15
Scenario analysis
In an attempt to define the best possible strategic asset allocation – i.e.
the allocation of assets to various asset classes, countries and currencies
– we have been employing “scenario technology” for more than 15 years
now. Put simply, we work together with internal and external experts from
a whole array of fields to draw up scenarios spanning between three and
five years and reflecting possible political, social and economic development
routes. These scenarios serve as a basis for our own portfolio optimization
method, “robust portfolio optimization,” as illustrated below using the
example of the Princely Portfolio:
Leverage boom
15%
Sluggish
progress
10%
Secular
stagnation
5%
0%
-5%
-10%
Deflationary
depression
Reflationary
growth
China hard
landing
Monetary
debasement
Expected return of optimized “robust” portfolio
(best positioning taking all scenarios into account)
Expected return of optimized portfolio for each scenario
Our portfolio specialists pick out the leading asset managers across the world.
16
Access to private equity
Private clients also benefit from LGT’s expertise for institutional investors.
Private equity involves investing in companies that are
investments are becoming more and more interesting,
generally not listed on a stock exchange. These companies
including for private investors. This enables them to diver-
are often startups or rapidly growing enterprises in need
sify their portfolio more broadly and tap into an additional
of considerable capital. Typical examples include Uber,
source of return with a low correlation to traditional asset
Airbnb or Spotify. However, established companies which
classes,” says Reto Stohler, a specialist in developing invest-
find themselves in choppy waters, such as Panasonic or
ment solutions for private clients. “We therefore wanted to
Toys“R”Us, are also the target of private equity investors.
Through a fresh injection of capital and suitable restructuring measures, the aim is to return these companies to
profit. Investments in such companies are usually made by
so-called closed-end private equity funds that are established for a term of several years. During this period, fund
managers try to increase the value of their investments
through entrepreneurial measures before reselling them at
a higher price. Following the sale, the capital is repaid to
investors, together with a share of any profit.
Independent studies show that investments in private equity
funds are very attractive in terms of return and diversification.
However, this asset class is normally reserved for major institutional investors. In particular, private equity funds require
their investors to make very large minimum deposits. The
capital also remains tied up over a period of several years
as a rule. What is more, there is strong demand for private
equity fund investments and the fund managers can be
particular when selecting their investors. As a result, without
expertise and an excellent network of relationships, gaining
access to investments in private equity is not easy. And it
is precisely here where the strengths of LGT, which has been
Coordinators of the investment solution for private clients:
Reto Stohler (left) and Christian Buchli (right)
investing in this asset class on behalf of the Princely Family
and its institutional clients for almost 20 years, lie. “We have
use our expertise in the area of private equity to develop
considerable experience when it comes to choosing the
an offering that is also available to our private banking clients.”
best fund managers, which we do using a tried-and-tested
The fact that private and institutional investors have different
and structured process,” says Marcel Dillier, Co-Head Key
requirements, especially with regard to investment volume,
Account Management. “We are currently in regular contact
has posed a challenge, although regulatory requirements
with around 350 specialist fund managers worldwide and,
have also made the development of any such offering for
as a result of our activities, are represented on the advisory
private clients extremely complex. In the end, a solution
boards of over 260 companies.”
has been developed through close cooperation between
Private Banking and Asset Management. Product Manager
Growing importance
Christian Buchli is convinced that the newly developed
The growing appeal of private equity has not gone unno-
offering responds to a genuine need: “Although private
ticed by private investors either. “What we are currently
equity investments are not suitable for every private investor,
seeing is a scarcity of investment opportunities, in some
they can increase the potential return on an investor’s
cases with negative real interest rates and a dear but vola-
portfolio if the investor in question fulfills the necessary
tile stock market. Under such circumstances, alternative
requirements and has a corresponding tolerance for risk.”
Commitment 17
How we practice
sustainability
Thinking and acting in a responsible and
long-term manner are deeply rooted in our
corporate culture.
with the UN Principles for Responsible Investment (UN PRI),
which we signed up to in 2008. Since 2009, we have offered our
clients a range of sustainable funds in which we analyze environmental, social and governance (ESG) criteria as well as corporate
data. We take our responsibility a step further by making impact
Our aim is to create and preserve lasting values for our clients,
investments in social enterprises that have developed scalable
our company and society. As far as our employees are concerned,
solutions to improve the quality of life of disadvantaged people.
we attach considerable importance to developing not only their
professional skills, but also their personality.
Commitment to the environment and climate
For us, our responsibility for protecting the climate means keeping
Responsibility as an investor
the carbon footprint of our whole company as small as possible
As a portfolio manager for private and institutional investors, we
and using natural resources extremely carefully. As a signatory
also implement the sustainability approach in our core business.
to the UN Global Compact, we have made a commitment to
For instance, we do not invest in any companies involved in the
contribute toward achieving the UN’s Sustainable Development
production, storage and supply of controversial weapons. Since
Goals (Agenda 2030) and also demand that our suppliers uphold
as early as 2003, we have consistently avoided investments which
the ten principles of the Global Compact as well. Since 2010,
pose significant environmental and social risks as well as risks to
we have been offsetting our Group’s entire CO2 emissions and
the way in which the company is managed. We also align ourselves
have also stated these in our portfolios.
India’s illiteracy rate is the highest in the world. The situation is worst among women and girls living in rural areas. LGT Venture Philanthropy supports the
organization Educate Girls, which is endeavoring to improve the situation through targeted action. www.lgtvp.com
18
Improving quality of life
Widespread poverty remains one of the most pressing challenges facing the world today. At the initiative of H.S.H. Prince
Max von und zu Liechtenstein, LGT Venture Philanthropy and
LGT Impact Ventures pursue the aim of improving the quality
of life for disadvantaged people. They focus on social organizations and enterprises that offer an effective solution to
a social or environmental problem. These are supported by
donations or investments as well as by the transfer of knowledge and access to networks. Whereas LGT Impact Ventures
invests in companies that have a positive social impact and
generate financial returns, LGT Venture Philanthropy supports
non-profit organizations that are funded by donations. Our
clients have the opportunity to take part in the commitment
we make in these areas.
Sustainability Report
Every two years, LGT publishes a Sustainability Report which sets out
in detail the sustainability goals we pursue and the specific measures
we have taken during the period under review. The report can be
downloaded from our website or ordered online.
www.lgt.com/en/publications
CO2 emissions in the portfolio
We want to show our clients the significance of climate and environmental risks in their portfolio. For this reason, we calculate, among
other things, the CO2 emissions of their investment decisions and compare the results with an appropriate benchmark.
19
Better, cheaper and yet profitable
Medical care in Brazil is poor. dr.consulta, a company supported by LGT’s impact
investing sector, is securing good-quality, low-cost treatment for more and more
people on low incomes.
150 million people in Brazil, or around 75 percent of the
visit the doctor on average four times a year. That amounts
population, have no access to effective healthcare provision.
to approximately 600 million doctor’s visits each year that
There is a shortage of public clinics, doctors are poorly trained
the current healthcare system falls well short of being able
and the diagnoses and treatment given are regarded as un-
to cover. Thomaz Srougi is convinced that, in addition to
reliable. On average, a patient waits 200 days just to get a
working well in São Paolo, the dr.consulta model is appro-
doctor’s appointment while it can take up to a year before
priate for the entire country and can be expanded to the
a diagnosis is made. Often it is too late to administer successful
whole of Latin America in the long term. “My aim is to
treatment. Former investment manager Thomaz Srougi saw
a gap in the market here and an opportunity to help.
dr.consulta, the company he set up in 2011, builds clinics
in São Paolo for people on low incomes.
In his clinics, Srougi focuses on high quality and dispenses
with any unnecessary luxuries in terms of fixtures and fittings.
The savings achieved allow dr.consulta to keep costs down.
Even though staff are given excellent training and the medical
and IT equipment used is state of the art, treatment costs
are between 60 and 90 percent cheaper than in the rest of
the private healthcare sector. Patients at dr.consulta are
diagnosed within two weeks. The success of dr.consulta
shows that Srougi is doing something right: “99 percent of
our patients would recommend us to their friends and family.”
The Brazilian has already opened ten clinics in São Paulo
and aims to increase this figure to 100 by 2020. The most
Building a chain of clinics for people on low incomes
in Brazil: Thomaz Srougi
important requirement is that the clinics have to operate
profitably and be productive – only in this way is it possible
improve people’s lives,” says Srougi. “Solving a problem
to make a lasting social impact, he says. Thomaz Srougi
always requires a lot of energy and effort, irrespective of
and his partner Cesar Camera, a former surgeon in São Paolo,
whether it affects just a few people or a lot of people. Why
have therefore invested a lot of time and money in devising
shouldn’t we then address a major problem straight away?”
a suitable business model. Their hard work has paid off. After
just two and a half years, the first clinic was turning a profit.
LGT has worked in partnership with dr.consulta since 2014
and supports the company by providing funding, operational
“When it became clear that the business model worked, we
expertise and access to networks. As part of its ICats Program,
began scaling it up. We raised more capital, strengthened
under which experienced professionals spend several months
our management team, invested massively in IT and opened
working at a portfolio company, LGT also supplied one of
new clinics.” As a result of the continuous improvement in
its ICats Fellows in 2015 to assist the company on the ground
processes and targeted marketing strategies, the clinics now
and on a full-time basis for eleven months in the areas of
already break even after just three months. Srougi is also
financing and fund-raising. LGT’s investments amount to
optimistic as regards further growth. Both the market and
12.5 million US dollars in the form of equity. Thomaz Srougi:
demand are sizeable. According to his own calculations,
“This investment will enable dr.consulta to set up a total of
the 150 million Brazilians that make up the target group
50 clinics by 2017 and reach around one million patients.”
Group Internal Audit
20 Organizational structure
LGT Group
CEO S.D. Prinz Max von und zu Liechtenstein
Foundation Board and
Group Management
CFO Olivier de Perregaux
Human Resources
Marketing & Communications
Philanthropy
Compliance, Controlling & Accounting,
Legal & Tax, Risk Controlling/Corporate Finance
Private Banking
Thomas Piske
Operations & Technology
(LGT Financial Services)
Dr. André Lagger
Asset Management
(LGT Capital Partners)
Dr. Roberto Paganoni
LGT has a lean and efficient organizational structure. This
heads of the Private Banking, Asset Management and Financial
allows us to make decisions quickly and independently. Roles
Services business units and the Chief Financial Officer (CFO),
and responsibilities in the LGT Group Foundation are defined
together with the Group CEO, H.S.H. Prince Max von und zu
in a transparent corporate governance structure. The Foundation
Liechtenstein, make up the Group Management, the Senior
Board, of which H.S.H. Prince Philipp von und zu Liechtenstein
Management Board.
is the Chairman, is the supervisory body for the Group. The
LGT Group Foundation H.S.H. Prince Philipp von und zu Liechtenstein
Group Internal Audit
LGT Group
CEO H.S.H. Prince Max von und zu Liechtenstein
Human Resources
Marketing & Communications
Philanthropy
CFO Olivier de Perregaux
Compliance, Controlling & Accounting,
Legal & Tax, Risk Controlling/Corporate Finance
Private Banking
Thomas Piske
Asset Management
(LGT Capital Partners)
Dr. Roberto Paganoni
Operations & Technology
(LGT Financial Services)
Dr. André Lagger
Foundation Board
Internal Audit
H.S.H. Prince Philipp von und zu Liechtenstein, Chairman
Daniel Hauser, Head Group Internal Audit
Dr. Rodolfo Bogni
1, 2
External Audit
K.B. Chandrasekar 3, 4
Dr. Phillip Colebatch 1, 2, 4
Dr. Dominik Koechlin
PricewaterhouseCoopers AG, Zurich
†
Prof. Dr. Conrad Meyer 3, 4
1
M ember of the HR and Nomination Committee
2
M ember of the HR and Compensation Committee
3
M ember of the Audit Committee
4
M ember of the Risk Committee
†
D eceased on 12 July 2015
21
Senior Management Board
H.S.H. Prince Max von und zu Liechtenstein
Dr. Roberto Paganoni
Thomas Piske
(1969), CEO of LGT since 2006. He began his
(1961) is a founding partner and has been CEO
(1958) has been CEO LGT Private Banking since
professional career in 1993 as an Investment
of LGT Capital Partners since 1998. From 1989
2009. After completing his studies in economics
Analyst and Associate at J.P. Morgan Partners
to 1997, he worked as an advisor for McKinsey
at the University of Innsbruck, he joined LGT Bank
in New York. In 1998, he returned to Europe to
& Company in Düsseldorf, Brussels and Zurich.
in Liechtenstein Ltd. in Vaduz in 1986. In 1998,
work for the private equity group Industri Kapital
Roberto Paganoni gained a Diploma in Mechanical
he became a member of the general management
(today IK Investment Partners). In 2000, he re-
Engineering from RWTH Aachen University before
and in 2001 was appointed president of the gen-
joined J.P. Morgan Partners, first as a Director
completing a Master of Business Administration
eral management of LGT Bank in Liechtenstein
in London, and from 2003 onwards as head of
and Doctor of Business Administration at the
as well as CEO Private Banking Europe. Thomas
the company’s German office. He holds a degree
University of St.Gallen. He is of Dutch/Italian
Piske is an Austrian national. He was Chairman
in Business Studies from the European Business
nationality, a Board Member of the Swiss Private
of the Liechtenstein Bankers Association between
School and completed an MBA at Harvard
Equity & Corporate Finance Association (SECA)
2004 and 2006.
Business School.
as well as a lecturer at the University of St.Gallen.
Dr. André Lagger
Olivier de Perregaux
(1962) has been CEO of LGT Financial Services
(1965) has been CFO of LGT since 1999. After
since 2001 and CEO of the Operations & Tech-
completing a Master of Economics degree at
nology business unit since 2006. He studied
the University of St.Gallen, he worked as a con-
Business Administration and Economics at the
sultant for McKinsey & Company in Zurich and
University of Berne before obtaining his doctorate
New York between 1988 and 1996. From 1997
from the same institution. Between 1994 and
to 1999 he was Senior Transaction Manager
1997, he worked for UBS AG in London and
and Head of Strategic Marketing for Center
in Zurich. From 1997 to 1998, he was Head of
Solutions at Zurich Financial Services in Zurich.
Corporate Controlling at Liechtenstein Global
Olivier de Perregaux is a Swiss national.
Trust AG in Zurich and CFO of LGT Capital Management in Vaduz from 1998 to 2001. André
Lagger is a Swiss national.
Bauer brothers, Hortus Botanicus, detail from “Lilium,” 1776/1804
“Private banking and asset
management clients also
take a long-term perspective
and a strong interest in the
stability and security of their
banking partner.”
H.S.H. Prince Max von und zu Liechtenstein, CEO LGT
Data and facts
26
2015 annual results and outlook
27
Financial highlights
28
Consolidated income statement
29
Consolidated balance sheet
30
Client assets under administration
31
Capital resources
32
Risk note/Disclaimer
26 Data and facts
2015 annual results and outlook
Economic volatility and monetary policy effects characterized
This international growth has resulted in revenue diversification,
the 2015 financial year. Against this backdrop, LGT significantly
economies of scale and (despite an ongoing high level of
increased total operating income by 14 percent to CHF 1149.3
investment in new business areas) increased and broad-based
million year-on-year. Net interest and similar income rose by
profitability. Efficient operating platforms, such as LGT’s central-
25 percent to CHF 115.3 million, reflecting efficient balance
ized IT infrastructure and services, have also made an important
sheet management. Income from services was up 12 percent
contribution to this development. A decisive factor in the
to CHF 783.7 million, attributable to both a larger asset base
successful development of the company remains its stable
and strong client activity. Income from trading activities and
ownership structure, which allows for a long-term orientation
other operating income rose 16 percent to CHF 250.4 million.
and low management and staff turnover.
Total operating expenses increased by a moderate 14 percent to
LGT has continuously expanded and enhanced its service offering
CHF 929.5 million in the period under review. Personnel expenses
in both Private Banking and Asset Management. Key factors
accounted for CHF 631.9 million (+6 percent) of this increase,
that are highly valued by clients are the group’s professional
mainly attributable to staff recruitment and performance-related
investment management capabilities, an open product architec-
compensation in line with better performance. Business and
ture, as well as the possibility to invest alongside the owners of
office expenses increased by 13 percent to CHF 186.9 million.
LGT, the Princely Family of Liechtenstein. LGT is continuously
expanding its alternative investment expertise, and is a leading
The cost/income ratio improved from 75.4 percent at the end
provider in this space, particularly in the private equity and hedge
of 2014 to 71.2 percent as at 31 December 2015. Depreciation,
fund segments, as well as in insurance-linked investments.
amortization and provisions rose from CHF 56.2 million last
year to CHF 110.7 million for 2015. This increase was driven
Outlook
in part by the straight line amortization of intangible assets
LGT is optimistic in its business outlook for 2016 and beyond.
from a private banking portfolio integrated in 2015 and by
Our consistently high level of growth and very good results for
specific provisions.
2015 are the result of our commitment to pursuing our longterm international growth strategy, and our constant efforts to
Overall, group profit increased by 28 percent to CHF 211.0 million
enhance quality. We will continue on this path, and therefore
in 2015. LGT is very well capitalized with high levels of liquidity.
offer our clients and employees a high degree of stability,
The tier 1 ratio was 20.1 percent as at 31 December 2015, com-
which is of immense value, particularly in this challenging
pared to 18.4 percent for the previous year.
environment. We will continue to serve as a reliable partner
to our clients in their financial matters and thank them for
Strong net asset inflows
the trust they place in us. We also thank our employees for
In 2015, LGT generated net asset inflows totaling CHF 8.8 billion,
their strong commitment throughout the reporting year.
a growth of 7 percent that exceeds the strong performance
reported for the previous year. Positive net asset inflows in both
Private Banking and Asset Management contributed to this
development. Assets under management grew by 2.7 percent
to CHF 132.2 billion compared to year-end 2014, despite
negative currency effects.
Profitable growth strategy
Since the beginning of 2011, LGT has acquired a total of approx.
CHF 40 billion in net new assets. Over the same period, the
Group’s assets under management have increased by over 50
percent, from CHF 86.1 billion to CHF 132.2 billion, which is in
part attributable to targeted acquisitions.
27
Financial highlights
Assets under administration
2015
2014
2013
2012
2011
CHF m
132 236
128 795
107 319
of which client assets under administration
CHF m
129 341
125 786
104 501 2
of which LGT’s Princely Portfolio
CHF m
2 895
3 009
2 818
CHF m
8 783
14 429
8 015 2
12 342
5 758
of which net new money
CHF m
8 783
6 755
8 015 2
10 515
8 562
of which through acquisition
CHF m
0
7 674
0
1 827
0
of which through disposal
CHF m
0
0
0
0
-2 804
Total operating income
CHF m
1 149
1 010
895
957
709
Group profit
CHF m
211
165
139
214
70
Appropriation of Foundation earnings and dividends
CHF m
-100 1
-100
-100
-206
-75
Group equity capital
CHF m
3 314
3 354
3 216
3 084
2 701
Total assets
CHF m
34 239
35 533
28 312
27 099
26 248
17.5
Net new assets
2
102 118
86 932
99 448
84 486
2 670
2 446
Ratios
Tier 1
%
20.1
18.4
21.3
21.5
Cost/income ratio
%
71
75
77
65
75 3
Liquidity Coverage Ratio
%
142.7
130.0
–
–
–
2 212
2 081
1 921
1 830
1 779
Aa2
A1
A1
Aa3
Aa3
A+
A+
A+
A+
A+
Headcount at 31 December
Rating 4
Moody’s
Standard & Poor’s
1
Proposed
2
Adjusted for reclassified special mandate
3
Excluding charges in connection with the sale of LGT Bank in Liechtenstein & Co. OHG
4
LGT Bank Ltd., Vaduz
28 Data and facts
Consolidated income statement
Consolidated income statement (TCHF)
2015
absolute
Change
%
2014
Net interest and similar income
115 256
92 459
22 797
25
Income from services
783 694
701 844
81 850
12
Income from trading activities
176 323
164 229
12 094
7
Other operating income
74 069
51 242
22 827
45
1 149 342
1 009 774
139 568
14
Personnel expenses
-631 859
-595 512
-36 347
6
Business and office expenses
-186 935
-165 483
-21 452
13
Other operating expenses
-110 704
-56 161
-54 543
97
Total operating expenses
-929 498
-817 156
-112 342
14
219 844
192 618
27 226
14
-8 803
-27 443
18 640
-68
211 041
165 175
45 866
28
-21
-195
174
-89
211 020
164 980
46 040
28
Total operating income
Operating profit before tax
Tax expense
Net profit before minority interests
Minority interests
Net profit
29
Consolidated balance sheet
Consolidated balance sheet (TCHF)
2015
absolute
Change
%
2014
Assets
Cash in hand, balances with central banks
4 533 193
9 271 191
-4 737 998
-51
Loans and advances to banks
7 304 389
4 547 824
2 756 565
61
11 846 270
10 501 690
1 344 580
13
657
5 398
-4 741
-88
784 649
1 542 335
-757 686
-49
Financial assets designated at fair value
2 158 223
2 740 986
-582 763
-21
Available-for-sale securities
3 611 479
2 648 976
962 503
36
Investments in associates
Loans and advances to customers
Securities held for trading purposes
Derivative financial instruments
2 895 487
3 009 842
-114 355
-4
Property and equipment
130 574
201 576
-71 002
-35
Intangible assets
377 469
414 646
-37 177
-9
Prepayments and accrued income
108 511
123 392
-14 881
-12
Deferred tax assets
85 691
63 509
22 182
35
Other assets
402 643
461 876
-59 233
-13
Total assets
34 239 235
35 533 241
-1 294 006
-4
784 209
1 350 562
-566 353
-42
25 492 928
26 182 580
-689 652
-3
1 045 516
1 379 421
-333 905
-24
455 809
532 742
-76 933
-14
Liabilities
Amounts due to banks
Amounts due to customers
Derivative financial instruments
Financial liabilities designated at fair value
Certificated debt
1 899 376
1 712 801
186 575
11
Accruals and deferred income
74 495
77 277
-2 782
-4
Current tax liabilities
50 024
73 142
-23 118
-32
Deferred tax liabilities
5 798
9 539
-3 741
-39
1 007 528
774 752
232 776
30
109 679
86 038
23 641
27
30 925 362
32 178 854
-1 253 492
-4
Other liabilities
Provisions
Total liabilities
Equity capital
Foundation capital
Retained earnings
Cumulative translation adjustments
339 044
339 044
0
0
1 914 982
1 756 692
158 290
9
-49 789
-39 119
-10 670
27
Other reserves
1 109 305
1 297 429
-188 124
-14
Total equity capital and reserves attributable to LGT’s equity holder
3 313 542
3 354 046
-40 504
-1
331
341
-10
-3
3 313 873
3 354 387
-40 514
-1
34 239 235
35 533 241
-1 294 006
-4
Non-controlling interests
Total equity capital
Total liabilities and equity capital
30 Data and facts
Client assets under administration
Client assets under administration (CHF m)
Client assets under administration (excluding the Princely Portfolio) which are stated according to the provisions
of the Liechtenstein banking law are as follows:
2015
2014
Client assets in own-managed funds
25 547
25 542
Client assets under management
32 658
31 216
Other client assets under administration
71 136
69 028
129 341
125 786
12 966
12 937
8 882
14 429
8 882
6 755
0
7 674
Total client assets under administration (including double counting)
of which double counting
Net new assets
of which net new money
of which through acquisition
Client assets in own-managed funds
Double counting
This item covers the assets of all the actively marketed
This item covers investment fund units from proprietary funds
investment funds of LGT.
as well as certain assets that are included in client assets under
management.
Client assets under management
The calculation of assets with management mandates takes into
Custodian assets
account client deposits as well as the fair value of securities,
Custodian assets (assets held exclusively for transaction and
loan-stock rights, precious metals and fiduciary investments
safe custody purposes) are excluded from client assets.
placed with third-party banks. The information covers both
assets deposited with Group companies and assets deposited
with third-party banks for which Group companies hold a
discretionary mandate.
Other client assets under administration
The calculation of other client assets under administration takes
into account client deposits as well as the fair value of securities,
loan-stock rights, precious metals and fiduciary investments
placed with third-party banks. The information covers assets
for which a management or advisory mandate is exercised.
31
Capital resources
Capital adequacy and the use of capital are monitored by the
to reflect their relative risk. Assets are weighted according to
Group and by individual operating units. Starting February 1,
broad categories of notional risk, first being multiplied by a
2015, the calculation of regulatory capital incorporates the
conversion factor and then being assigned a risk weighting
capital requirements following the Capital Requirements
according to the amount of capital deemed to be necessary
Regulation No. 575/2013 (CRR) and the Capital Requirements
for them. Off-balance sheet commitments and default risk
Directive No. 2013/36/EU (CRD 4) as implemented into Liechten-
positions are also multiplied and risk-weighted. Market risk
stein law. The minimum capital requirement is 8 percent of
is calculated with the standard approach.
risk-weighted assets which consists at least of 4.5 percent
common equity tier 1 (CET 1) capital, 1.5 percent additional
All results are based on the full application of the final CRR
tier 1 capital and 2 percent tier 2 capital. In addition, LGT has
and CRD 4 framework in the European Union and thus without
to fulfill 5 percent buffer requirements (2.5 percent capital
consideration of applicable transitional rules. The Group and
conservation buffer and 2.5 percent systemic risk buffer). The
its individually regulated operations have complied with all
whole buffer requirement must be fulfilled with CET 1 capital.
externally imposed capital requirements throughout the period.
Capital ratios measure capital adequacy by comparing the
The following table analyzes the Group’s capital resources as
Group’s eligible capital with balance sheet assets, off-balance
defined for regulatory purposes:
sheet commitments and market positions at weighted amounts
Capital resources (TCHF)
2015
2014
3 313 873
3 354 387
thereof non-controlling interests
331
341
thereof “innovative” instruments
0
0
15 042
-132 240
Capital resources
Other adjustments
Intangible assets
CET 1 capital
additive tier 1 instruments (2014: upper tier 2 capital)
Tier 1 capital
tier 2 items (2014: lower tier 2 capital)
Own funds
Required capital (TCHF)
Approach
Credit risk
Standard
On-balance sheet
Non-counterparty risks
-377 469
-414 646
2 951 446
2 807 501
0
0
2 951 446
2 807 501
23
36
2 951 469
2 807 537
904 331
994 643
904 331
978 561
0
16 082
Market risk
Standard
100 395
79 785
Operational risk
Basic indicator
152 694
143 098
Credit valuation adjustment risk
Standard
Total
Capital adequacy ratio 1
1
2015: CET 1 capital ratio: 20.1%; Tier 1 capital ratio: 20.1%; Total capital ratio: 20.1%
17 863
0
1 175 283
1 217 526
20.1%
18.4%
32
Media Relations
Christof Buri
Phone +423 235 23 03
[email protected]
Risk note/Disclaimer
This publication is for your information only and is not
intended as an offer, solicitation of an offer, public
advertisement or recommendation to buy or sell any
investment or other specific product. Its content has
been prepared by our staff and is based on sources
of information we consider to be reliable. However,
we cannot provide any undertaking or guarantee
as to it being correct, complete and up to date. The
circumstances and principles to which the information
contained in this publication relates may change at
any time. Once published, information shall therefore
not be understood to imply that no change has taken
place since its publication or that it is still up to date.
The information in this publication does not constitute
an aid for decision-making in relation to financial, legal,
tax or other consulting matters, nor should any investment or other decisions be made on the basis of this
information alone. It is recommended that advice be
obtained from a qualified expert. Investors should be
aware that the value of investments can fall as well
as rise. Positive performance in the past is therefore
no guarantee of positive performance in the future.
The risk of price and foreign currency losses and fluctuations in return as a result of unfavorable exchange
rate movements cannot be ruled out. There is a possi-
bility that investors will not recover the full amount
they initially invested. We disclaim without qualification all liability for any loss or damage of any kind,
whether direct, indirect or consequential, which may
be incurred through the use of this publication. This
publication is not intended for persons subject to
legislation that prohibits its distribution or makes its
distribution contingent upon an approval. Any person
coming into possession of this publication shall therefore be obligated to find out about any restrictions
that may apply and to comply with them.
Bauer brothers, Hortus Botanicus, detail from “Cucurbita pepo L.,” ca. 1778
LGT Bank (Switzerland) Ltd.
Lange Gasse 15, P.O. Box, CH-4002 Basel
Phone +41 61 277 56 00, [email protected]
LGT Bank AG
Zweigniederlassung Österreich
Bankgasse 9, A-1010 Vienna
Phone +43 1 227 59-0, [email protected]
LGT Bank (Singapore) Ltd.
3 Temasek Avenue, #30-01 Centennial Tower
Singapore 039190
Phone +65 6415 3800, [email protected]
LGT Group Foundation
Herrengasse 12, FL-9490 Vaduz
Phone +423 235 11 22, [email protected]
UID: CHE-208.624.214
www.lgt.com
LGT Bank (Hong Kong)
4203 Two Exchange Square
8 Connaught Place Central
G.P.O. Box 13398, Hong Kong
Phone +852 2868 0201, [email protected]
50335en 0516 2.6T BVD
LGT Bank Ltd.
Herrengasse 12, FL-9490 Vaduz
Phone +423 235 11 22, [email protected]