How One Investor Turned a Bet on the Swiss Central Bank Into Millions
Theo Siegert’s stake doubled in value last year to nearly $25.3 million
By Brian Blackstone
ZURICH—Meet the biggest winner of one of the past year’s best equity bets: a German investor who bought big into Switzerland’s central bank.
Düsseldorf, Germany-based businessman Theo Siegert’s stake in the Swiss National Bank SNBN 0.34%▲ soared in value over the past year as the central bank’s stock price gained over 250%.
The SNB is a rarity among central banks—Japan and Belgium are others—in that it has listed shares. The SNB’s shares have more than tripled since the start of last year—even though analysts struggle to explain why—and traded at 5,860 Swiss francs early Thursday.
Only one stock on the Stoxx Europe 600 index gained by more: Belgian drugmaker Ablynx NV surged after being bought out by French rival Sanofi in January.
Mr. Siegert was the SNB’s second-largest shareholder last year, according to the SNB’s annual report released Thursday, ceding the top spot he held at the end of 2016 to the Swiss canton of Berne. Mr. Siegert reduced his stake by 650 shares last year, leaving him with 6,070 shares at year-end. Those 650 shares could have been worth well over two million francs, depending on when they were sold.
Even accounting for the lower number of shares, Mr. Siegert’s stake doubled in value last year, to nearly 24 million francs ($25.3 million), based on the year-end closing price. His 6,070 shares were worth 35 million francs on Thursday, assuming he has held on to them this year.
Mr. Siegert didn’t respond to requests for comment. He has previously declined to comment on his investments.
SWISS BLISS
German investor Theo Siegert is the SwissNational Bank's largest private shareholder,and the value of his stake has soared alongwith the SNB's share price.
Stake in the Swiss National Bank owned by Mr. Siegert
Source: Swiss National BankSWISS NATIONAL BANK´S WEEKLY SHARE PRICE, SINCE THE END OF 2007
Source: WSJ Market Data Group Note: Through March 21Mr. Siegert, 70, isn’t a household name even in Germany, where he runs his family business, de Haen-Carstanjen & Söhne. It was originally set up as a trading business 200 years ago, dealing with goods for drugstores among other things. Today it is a family office, managing investments. He sits on the boards of several large German companies including E. ON SE , Henkel AG and Merck KGaA, according to his company’s website.
Still, the root of the gains for Mr. Siegert and the SNB’s other 2,191 private investors is a bit of a mystery. The SNB isn’t like other stocks and pays a tiny dividend. It is governed under laws for both public and private institutions, and owned primarily by individual Swiss states, known as cantons, and cantonal banks. Public-sector bodies own almost 80% of voting shares.
Shareholders have no say in the SNB’s monetary policy or how it manages its massive 790 billion franc war chest of foreign-currency stocks and bonds, built up through years of interventions to weaken the franc.
On the plus side, the SNB is ultrasafe. It prints its own currency—and the franc is among the world’s strongest—which it uses to buy assets. When the SNB loses money, it can always print more. Recently, its profit has been on a tear, aided by rising global stock markets, low bond yields and a weaker franc. The SNB earned a record 54 billion francs in profit last year.
Of that, two billion francs went to the federal government and cantons. A paltry 1.5 million francs was paid out as dividends, working out to 15 francs a share, which is capped by law. The rest went to the SNB’s own currency provisions and other reserves.
Among those who didn’t benefit from the SNB’s share-price surge last year: its own three-person governing board. According to the annual report, Chairman Thomas Jordan and the bank’s other two board members, Andrea Maechler and Fritz Zurbrügg didn’t own any SNB shares. The SNB said a “party related to” Mr. Jordan owned one share.
—Nina Adam contributed to this article.
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