The driving force behind Swiss Life's real-estate portfolio is leaving the company, finews.ch can reveal. The departure follows disagreements with the chief investment officer over strategy.
Swiss Life, the country's largest life insurer, in recent years made a series of massive real-estate acquisitions that drew attention: Hansakontor in Dortmund, White Tower in Munich, a combined apartment and office property in St. Gallen worth 571 million Swiss francs.
The value of the real-estate portfolio in Switzerland alone reached 24.2 billion francs, up a whopping 10 billion since 2014 – a breath-taking expansion rate.
The total value of the company's own properties and the management of third-party real estate is more than 60 billion francs. Real estate has become very lucrative for the insurer, boosting income of its asset management unit.
Departure a Significant Loss
Martin Signer, the brain behind the real-estate business has now left the company. Swiss Life confirmed the departure to finews.ch.
The insurer said that Swiss Life Asset Managers had assumed the lead over the real-estate business from Signer. The executive will remain an adviser to the company and responsible for special projects at Swiss Life Asset Managers until the end of the year, a spokesman for Swiss Life said.
The departure of Signer is a significant loss for Swiss Life: he was not only the head of Swiss Life Property Management and a seasoned executive, but a key figure within asset management.
Strategy to Diversify
Swiss Life Asset Managers has become a significant wealth manager in its own right. In a bid to diversify its business, the company built up the management of its own properties, but also for third-party real estate.
Like its rivals, Swiss Life is struggling to earn a proper yield on the assets of its customers, with equities and bonds returning less than they used to. Real estate stands apart because profits are manageable and predictable via the rent the owner charges.
The price of a property is of secondary importance. Swiss Life, not least due to regulatory requirements, has a more-than-solid capital base which needs to be invested with reasonable return.
Man at the Front
Signer was the public face of Swiss Life's property arm. He selected the properties to buy, and made the purchases. He also defended controversial rent increases in front of TV cameras – for instance in the case of Manor's department store on Bahnhofstrasse in Zurich.
Two others were behind Signer and in charge of the insurer's real-estate strategy: Swiss Life CEO Patrick Frost and Chief Investment Officer Stefan Maechler.
Maechler, 56, followed in the footsteps of Frost when the latter was promoted to lead the company in 2014.
Attackers and Defenders
Maechler, a former banker with Credit Suisse and head of Rued, Blass & Cie. private bank, is a real-estate expert. He was one of the founders of Swiss Prime Site (SPS) and acted as its chairman for years.
Maechler is known as an attacking executive: he ordered the shopping spree of Swiss Life in the real-estate market of Switzerland and Signer executed the strategy, regularly paying top dollar.
Against the Flow
The company has kept buying in cities even as the level of empty office space rose and rents declined. In Geneva, the company paid 535 million francs for the UBS headquarters as the city was starting to struggle to maintain its status as a private banking center.
Sources said that Signer urged Maechler to be more cautious and to apply a more conservative investment policy. To no avail: Swiss Life in July announced the purchase of a property worth 588 million francs. It was to be Signer's last deal for the insurer.
