Swiss Private Equity & Corporate Finance Congress 2012 Dr. Bernd W. Pfister Crisis Investing
www.seca.ch Page 2
2001-2012 Membership Development (per April 2012) SECA Mitglieder Eintritte Eintritte Young SECA per 31.12. Austritte Mitglieder per 31.12 375 354 329 314 291 265 SECA Mitglieder Young SECA per 31.12. Mitglieder per 31.12. 4 29 157 177 188 196 216 125 350 346 77 45 41 65 40 21 28 17 22 14 20 16 48 44 23 21 51 50 36 40 25 29 19 4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2011 2012 Page 3
Four key SECA objectives for the year 2012: 1. To promote to investors, the case for investing in Swiss private equity and venture capital. 2. To influence public policy and raise further the awareness of the economic benefits of corporate finance, private equity and venture capital. 3. To influence and work with regulatory organizations and professional associations and lawmakers to create a competitive framework for the Swiss private equity and venture capital industry. 4. Provide useful services to our members and communicate effectively with them. Page 4
July 2012 - Where do we stand? Page 5
Today: Unsustainable Levels Page 6
European Banking Crisis 2009-2012 Slow Motion Deposits are moving abroad via Mouse Clicks from PIIGS Banking System like 1857 Page 7
European Default History Albania (1990) Austria-Hungary (1796, 1802, 1805, 1811, 1816, 1868) Austria Croatia (1938, 1940, 1945 [16] ) (1993 1996) [16] Bulgaria Denmark (1932 [citation needed], 1990) (1813) (see Danish state bankruptcy of 1813) Spain is Europe s Nr. # 1 Defaulter! England (1340, 1472, 1596) France (1558, 1624, 1648, 1661, 1701, 1715, 1770, 1788, 1812) Germany (1932, 1939, 1948 [16] ) Hesse (1814) Prussia (1683, 1807, 1813) Schleswig-Holstein (1850) Westphalia (1812) Greece (1826, 1843, 1860, 1893, 1932, 2012) Hungary (1932, 1941) The Netherlands (1814) Poland (1936, 1940, 1981) Portugal (1560, 1828, 1837, 1841, 1845, 1852, 1890) Romania (1933) Russia (1839, 1885, 1918, 1947, [16] 1957, [16] 1991, 1998) Spain (1557, 1575, 1596, 1607, 1627, 1647, 1809, 1820, 1831, 1834, 1851, 1867, 1872, 1882, 1936-1939, 2013(?)) Sweden (1812) Turkey (1876, 1915, 1931, 1940, 1978, 1982) Ukraine (1998 2000) [16] United Kingdom (1749, 1822, 1834, 1888 89, 1932) [16] Yugoslavia (1983) Page 8
There is light in the tunnel! But it takes Decades not Years Page 9
.. and it takes Growth & Inflation: US slowing down Page 10
China: Slowing down fast with hugh Misallocation of Capital Real Estate Bubble This is bigger than Spain! Kangbashi, China, built for a population of one million, is inhabited by just a few thousand A high-speed train in Beijing: a technical marvel, but its fares can't cover its costs Page 11
Where is the Opportunity? Some Practical Advise. Crisis Investing or Riches among the Ruins! Three Steps to Success: 1. Realize Problem 2. Avoid Risk 3. Take the Opportunity $ Panic Page 12
Case Study 1: Scandinavian Banking Crisis 1990-1995 - 33% Realize Problem Avoid Risk Take the Opportunity Page 13
Case Study 1: Scandinavian Banking Crisis BUY SEK/CHF (12/1992) BUY Equity & Real Assets Realize Problem Avoid Risk Take the Opportunity Page 14
Don t be Close to the Fire! Realize Realize Problem Problem Avoid Avoid Risk Risk Take Take the the Opportunity Opportunity Page 15
Case Study 1: Economic Adjustment Process after the Scandinavian Banking Crisis 1990-1995 - 55% Page 16
Look out for Prime Real Estate in Athens, Madrid and Dublin (after Devaluation) BUY (12/1992) Realize Problem Avoid Risk Take the Opportunity Page 17
Case Study 2: Russian Crisis 1998-1999 SWITCH RUB/CHF AND BUY RUSSIA EQUITY BUY Russian Private Equity (9/1998) Equity -75% RUB/CHF - 68% Realize Problem Avoid Risk Take the Opportunity Page 18
Case Study 3: Islandic Banking Crisis (2008-2009) SWITCH ISK/CHF BUY MAREL FOOD (9/2009) BUY Islandic Equity & Real Estate Währung -75% Equity -50% Realize Problem Avoid Risk Take the Opportunity Page 19
Attention: Govenments Steal your Money regularily via Executive Order after the Crisis USA France Germany Page 20
Thank you very much Have a nice Conference Day Dr. Bernd Pfister Paros Capital AG Zugerstrasse 8a 6340 Baar Page 21
Eigentum verpflichtet so steht es im Grundgesetz der BRD. Diese schwammig gehaltene Formulierung im Artikel 14 könnte Immobilienbesitzer in den nächsten Jahren teuer zu stehen kommen. Deutschland hat bereits zweimal eine Zwangshypothek (1923 und 1948) aus Häuser gesetzt. Artikel 14.(3) Eine Enteignung ist (nur) zum Wohle der Allgemeinheit zulässig. Sie darf nur durch Gesetz oder auf Grund eines Gesetzes erfolgen, das Art und Ausmaß der Entschädigung regelt. Die Entschädigung ist unter gerechter Abwägung der Interessen der Allgemeinheit und der Beteiligten zu bestimmen. Wegen der Höhe der Entschädigung steht im Streitfalle der Rechtsweg vor den ordentlichen Gerichten offen. Das Grundgesetz schützt Eigentum eben nicht und rechtlich betrachtet ist eine solche Zwangshypothek problemlos zulässig. Page 22