Prince with a purpose

But you wouldn’t guess any of this from talking to Prince Max. Unassuming, modest and if anything a little shy, the prince only gets really excited when he is talking about two subjects — finance and art. And he knows a lot about both.

“My DNA is not just finance, but I like it!” he says.

He can say that again. As group CEO of the company, he has helped expand the firm into 20 locations across Europe, Asia and the Middle East, with 1,700 employees. If you are rich and want to get richer, there are probably few better people to call right now. And calling him has just got easier, with LGT Group last month opening its first office in the UAE, after securing a category four licence from the DIFC to provide an advisory service.

“The last couple of years have been good for us,” says Prince Max.

Really? Haven’t we just come out of the worst recession in living memory? In any case, doesn’t everyone have a huge distrust of the entire industry these days? Not so. The unique family ownership structure of LGT has resulted in more clients flocking their way, on a regular basis, he says.

The region has $1.4 trillion of captive wealth, and LGT is keen to get a slice of the pie.

“I do think that in bull markets when everything is easy and people take risks, you don’t see quality. People run around and tell you incredible stories. The amount of risk they take is often hidden. It’s really in difficult times where quality shows, and when you can lose a lot of money or make a lot of money. I would say that our performance over the long term has been very strong. It’s why we are developing well, not just with private clients but on the institutional side with sovereign wealth funds and pension funds all over the world,” he says.

There is no shortage of competition in his field, but again, Prince Max keeps coming back to the company’s ownership structure, which he says will continue to attract more clients.

“Most of our competitors are public companies. So they have shareholders who can sell their shares the next day. Many of the shareholders have a short-term orientation. So the management teams of these companies have a different mindset in the way you pursue the business. We have one shareholder who has been in control for 80 years and is looking to stay — and structurally not able to sell tomorrow. It leads to a completely different way of doing business,” he says, adding: “In our situation the family is using the competence of the organisation for its own needs and is the largest client itself and so has a lot more skin in the game than the leadership structures of other organisations. So our strategy is very different and so is our balance sheet. And it benefits our clients. It’s very risk conscious and focused.

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“We have remained outside risky businesses that provide good short-term opportunities but long-term risks. So we have given very stable earnings throughout the financial crisis.”

There is certainly no shortage of clients in this region for Prince Max to be targeting. According to the 2012 Arabian Business Rich List, the world’s 50 richest Arabs are between them worth $257.2bn — up by $1bn on the previous year. The top ten in the GCC Indian Rich List this year were all billionaires.

While much of Europe is still dragging itself out of recession, Dubai is on course for 4 percent GDP growth this year, while the Dubai Financial Market recently hit a three-year high.

But Prince Max says that while he welcomes the economic upturn, it won’t be changing the way he does business. “We don’t take decisions like entering a market on the basis of recent stock market developments but over last four years Dubai has gone through interesting times and we looked at how Dubai has performed.

“In many ways some of the really strong points of Dubai have become clearer. We are confident this is going to be a good long-term base for us. My view on the stock market is [that] we have seen a good couple of months and that has let a lot of people to go back into shares, the psychology has shifted. That is reflected in the latest bull run,” he adds.

Is he not worried however that Europe’s financial crisis could blow East?  “The fundamentals here are different to Europe. Each area has its own set of issues and I would say that the challenges of Europe are quite unique. Here the oil-related factors are unique and a key driver of the economy.  I wish we had that in Europe,” he says.

If anything, Prince Max admits, bad economic times are when he can do the most good for his clients.

“You have better opportunities in a bear market. We acquired a private bank in 2009. There was hardly anybody else looking at businesses. We could acquire at a very attractive price. You get those when a lot of people are in distress and you have a longer term perspective. You can see others are scared and distracted — in these situations you can really move forward,” he says.

So what now? LGT Group will be quickly expanding its Dubai base, turning it into a regional hub. From here it will seek out the best high net worth individuals it can find, with Prince Max stressing that waiting around to get business through recommendations is not enough — the company will be actively looking for new business.

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Once found, he says the best long-term return for clients will come from private equity investments. “I think private equity over the  long term is pretty interesting. I would recommend you to be diversified, as nothing at this point looks super attractive. Equities are fairly priced and fixed income is not easy. I would do private equity in Europe where banks are not lending much at all to great companies, which you can acquire for almost nothing,” he says.

What about gold? It’s stuck around $1,580 an ounce having previously crossed $1,900. Wasn’t it meant to be soaring to $3,000 pretty soon? “The experts in our house always recommend gold more than me. I just find it a very difficult asset to assess and if an asset doesn’t have predictable cash flows, for someone like me with a very traditional approach, it makes it very tricky. It’s fine to have some part of your portfolio in gold [but] I wouldn’t give it an overly large portfolio,” he says.

Whatever the success of the LGT Group in the region, one thing for sure is that the prince won’t be going short anytime soon. On top of the considerable financial wealth, which was once valued by Forbes at over $3bn, there is the small matter of his family’s fabulous art collection.

He explains: “Our family goes back 900 years and it has been wealthy for a very long time, so the family has collected over centuries art. Over that time the collection has become one of the most significant private collections in the world. It spans from fifteenth century to end of nineteenth century. We have mainly paintings but also porcelain, furniture and weapons.”

The good news is that some of the art may, in the next couple of years, be on display in Dubai — it is currently doing the exhibition rounds in the Far East.

As for Prince Max himself, the future is likely to be very much more the same. A finance man inside out, he says he has never had — and never will — any intention of doing something different.

With $98.6bn of assets under management, who can blame him.