The leader of one of the world’s smallest nations oversees a nearly 1,000-year-old dynasty worth billions, which has persevered through wars, natural disasters, and controversies.
Presently, the financial enterprise associated with Prince Hans-Adam II of Liechtenstein is prospering on his main area of expertise: overseeing the wealth of the global elite.
In the previous month, LGT Group, the private banking and asset management company belonging to the royal family, disclosed that it had reached a new high in assets under management, totaling around 306 billion Swiss francs ($334 billion) as of June 30, marking a 6% surge from the previous year’s end.
This month, the Vaduz-headquartered company finalized its acquisition of Aberdeen Plc’s discretionary fund management operations in the United Kingdom and Jersey, adding to a list of at least three other external investments planned for 2021.
Olivier de Perregaux, the 58-year-old CEO of LGT Private Banking, stated, “We will maintain our search for potential opportunities, but our primary emphasis remains on fostering organic growth.”
LGT’s rapid expansion marks a significant turnaround for Liechtenstein, a small Alpine nation with a population of 39,000, which was once notorious as one of the world’s most prominent tax havens.
In the past decade, this nearly century-old company has seen its assets under management and operating income more than double, even as its business faced challenges following the 2008 financial crisis when offshore financial centers, including those in the US and other countries, came under scrutiny.
Liechtenstein, Country in Europe
Liechtenstein officially the Principality of Liechtenstein is a German-speaking and doubly landlocked country and microstate located in the Alps between Austria and Switzerland. It is the sixth smallest nation worldwide. Liechtenstein is a semi-constitutional monarchy headed by the prince of Liechtenstein.
Liechtenstein is bordered by Switzerland to the west and south and Austria to the east and north. It is Europe’s fourth-smallest country, with an area of just over 160 square kilometres (62 square miles) and a population of 39,039 (2021), WorldBank. Divided into 11 municipalities, its capital is Vaduz, and its largest municipality is Schaan. It is also the smallest country to border two countries.
Royal Wealth and LGT’s Expansion
LGT was among the firms that attracted talent from Credit Suisse after the Zurich-based bank’s downfall, and it was later acquired by UBS Group AG. This acquisition helped increase its workforce to approximately 5,000 employees.
In August, Ajay Punjabi, a former executive from Credit Suisse, joined LGT’s India wealth division, becoming one of several former Swiss bank employees to join the firm this year.
“We are actively expanding our recruitment efforts,” de Perregaux commented. “The Credit Suisse-UBS deal is just one of several factors driving our growth.”
LGT’s ongoing success is also propelling Prince Hans-Adam into higher echelons of extreme wealth, solidifying the 78-year-old’s status as Europe’s wealthiest monarch.
As the sole beneficiary of LGT, the prince currently ranks as the 215th richest individual globally, with an estimated net worth of approximately $9.2 billion, according to the Bloomberg Billionaires Index. This marks a significant climb of 71 places since the beginning of the year.
In contrast to other European monarchs, such as Bernard Arnault, King Charles III of Britain, Prince Hans-Adam personally possesses his family’s most valuable asset, establishing it as the longest-standing fortune in Bloomberg’s wealth ranking.
The wealth of the prince and his family originated from lands acquired in the 12th century, encompassing a vast territory spanning Germany, Austria, Hungary, and the Czech Republic at one point. LGT, founded in 1921 with a staff of 10, was acquired by the royal family roughly a decade later during the Great Depression.
Prince Hans-Adam’s Legacy
In the 1970s, Prince Hans-Adam assumed control of LGT after his father entrusted him with the task of restructuring the family’s holdings, which had suffered from confiscations and mismanagement during World War II.
Following the stabilization of the firm, the former trainee of a London bank expanded its operations beyond his home nation, with LGT opening its inaugural international branch in Hong Kong in 1986, shortly before he ascended to the throne as Sovereign Prince of Liechtenstein.
Apart from their substantial involvement with LGT, where the prince and his family rank as the most significant clients, the royal lineage of Liechtenstein still possesses land and real estate holdings, including a castle that overlooks the Rhine River.
Furthermore, Prince Hans-Adam has assembled an impressive art collection, featuring works by renowned artists such as Anthony van Dyck, Peter Paul Rubens, and Bartolome Esteban Murillo.
However, it is his financial empire that primarily fuels his wealth. According to Bloomberg’s wealth index, LGT’s value has surged by approximately 25% this year, surpassing the performance of the MSCI World Bank Index.
Similar to Switzerland, Liechtenstein was once recognized for its stringent bank secrecy regulations. However, in 2008, the principality enhanced its transparency measures in response to the use of data stolen from LGT by Germany to prosecute individuals for tax evasion.
LGT Comeback, Leadership Shift, and Expanding Worldwide
LGT, the largest bank in Liechtenstein, experienced a period during which customers were withdrawing their funds, but this trend reversed course in 2010. From the end of that year until 2012, LGT recorded approximately 22 billion Swiss francs in net inflows, which is more than three times the total from the preceding three years, according to data compiled by Bloomberg.
Taking the helm of LGT Group is Prince Hans-Adam’s second eldest son, Max, a 54-year-old former banker from JPMorgan Chase & Co. The bulk of LGT Group’s revenue comes from wealth management, and the company also operates an impact-investing division.
Max and his family have played pivotal roles in key decisions regarding their financial empire, including the acquisition of UBS’s Austria wealth-management business in 2021 and similar transactions involving Australia’s Crestone and India’s Validus Wealth last year.
In 2022, LGT marked its return to the German market by inaugurating a private banking office in Hamburg. The firm has intentions of ongoing global expansion, but it appears improbable that they will venture into entirely new markets in the immediate future.
“As far as industry sectors are concerned, we’ve positioned ourselves where we aimed to be,” commented de Perregaux. “Now, our focus is on advancing within those existing markets.”
The story of LGT and Prince Hans-Adam II of Liechtenstein is one of remarkable resilience and prosperity. LGT’s recent growth and global expansion have revitalized the small Alpine nation’s prominence.
Prince Hans-Adam’s unique blend of personal wealth, historic assets, and financial acumen has propelled him to become one of the world’s wealthiest individuals.
His legacy is not only about stewarding a centuries-old dynasty but also about navigating a dynamic financial landscape with strategic vision. With LGT’s resurgence, leadership transition, and expanding reach, the future looks promising for this enduring wealth management institution.