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Editorial

Dear readers, Consolidation in the Swiss banking market is accelerating, as traditional banking firms are taken over, integrated or disappear altogether. Our response: “We are here for you.” Just now, the attractiveness of a stable partner has never been more evident. Vontobel is, and remains, the independent Swiss Private Bank, backed by a strong family shareholding group and solid capital base.

2011, our consultative process Advisory@Vontobel is one way we are achieving this objective. The banking industry has recognised our expertise, awarding us accolades such as “Best Private Banking Boutique” and the “Best Wealth Management Advisory in Switzerland,” reinforcing our commitment to excellence. We are on the ground where our clients are – most recently, with a new office in Dubai.

The new issue of “blue” is dedicated to the theme of “family”. In challenging times, the family is a safe haven and source of energy. Our profile of the clown Dimitri reveals a touching and inspiring character. With her friendly, energetic personality, Hubertine Underberg embodies a traditional family business and active entrepreneurship.

And in a household spanning four generations, the Compagnonis, a Grisons-based farming family, bring together passion and entrepreneurial spirit as well as strong family bonds.

I hope you will enjoy the issue, and I wish you as well a very Merry Christmas with your family and friends.

Cordially yours,

Our strengths have been built up over decades, based on the forward-looking ideas of Dr Hans Vontobel, now Honorary Chairman of the Vontobel Group, who celebrated his 95th birthday recently in good health.

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In an evolving banking environment, we aim to satisfy our clients with first-class services. Launched in mid-

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Peter Fanconi Head of Private Banking peter.fanconi@vontobel.ch

Content Theme: Family ∙ Underberg: thanks to tradition, ahead of its time ∙ Dimitri and his three families ∙ Old tradition – constant change ∙ The Far East: keen on family values

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Macro: The global economy: a review of 2011 and the outlook for 2012

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Opportunities: The Swiss watch industry continues to soar

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Blue Pages: News from the Vontobel Group

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Care & Share: Education for the future of Uganda

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Column: Family as the elixir of life

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Culture and cuisine: Inside Zurich

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Theme

Underberg, the herbal digestif, has existed since 1846. Hubertine Underberg-Ruder represents the fifth generation of the family’s entrepreneurs. Our conversation with her addressed family, succession planning, tradition, innovation, and other issues important for strong family businesses.

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By Angela Obrist & Urs Thaler

Theme: Family and family businesses

Underberg: thanks to tradition, ahead of its time Underberg is a special name.

Yes, absolutely. Bearing the family name, which is also connected to a product, means two things for me – an honour and also an obligation. This is especially true in my case, as I am bearing the responsibility for the family business. But I can tell you from conviction: It is a wonderful challenge.

Sooner or later, those who, like you, are born into a traditional family business must ask themselves whether there is a clearly defined assignment waiting for them behind the next two or three bends on the path of life. Was that the case for you, too?

Our parents always made it clear to all of us children that we could only have a role in the company if, first, we were suited for it, and second, if we felt it as a calling. They never would have forced any of us to take on responsibility in the company. This mission has to fit you like a glove, otherwise you won’t feel good in it. Having responsibility for a company is exactly the same thing. Here, too, your mission and your capabilities have to be aligned. It’s no use to wish for a successor in the family if no suitable person is there. I certainly hope that someday, one of my children will take over from me in the corporate management – but that will only work if the wish is objectively the right one. If you want to run a business, you have to be capable, you have to be able to rise to this task and breathe life into the company.

At the time, how did you experience the succession process, at the end of which you were chosen to be the company’s future family representative?

My father told us kids early on that he wanted to put the responsibility for the company in the hands of a single individual, and that he would take that decision. As the

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past has shown at Underberg, there can be real problems if multiple successors are installed. If they have different ideas about how to resolve important issues, it can break a company apart.

Reinventing the company has to be possible at any time.

How old were you when your father asked you if you wanted to carry on in his footsteps in the House of Underberg?

I was just about to finish my doctorate, so I was in my late 20s. I wasn’t married yet, but already engaged. My father asked me over the Pentecost holiday. Of course, he would have liked a quick response. But I asked to have until Christmas to make the decision, in order to think everything over very well.

Were there any doubts in your mind?

“Doubts” is the wrong word. For me, it was about something else. Before I could make my decision, I simply wanted to check out all the relevant aspects, and also discuss it with the people affected by my decisions. It was clear to me that I would decide the matter together

Dr. Hubertine Underberg-Ruder is Chairman of the Board of Underberg AG, headquartered in Dietlikon (ZH). Holding a doctorate in natural sciences, she entered the family business in 1991.

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Photo: Vera Hartmann, 13photo

Representing the fifth generation of her family, Hubertine Underberg-Ruder bears the responsibility for the family business today.

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with my fiancé at the time – my husband today, Franz Ruder – because it would affect the lives of both of us.

For example, I wanted to discuss the question of worklife balance with him – we both knew that we wanted to have children. Then I wanted to talk to my siblings. That was very important to me, because after the succession has been decided, the connection to the family remains, of course. So I also wanted to include conversations with them in my decision.

What happened then?

Then I decided. I did not need quite all the time up to Christmas to think it over. Instead, I went to my father in the autumn and told him: Yes, this is the best, greatest, most wonderful job I can imagine. I want to do it – and with my husband as well, who then also took over responsibility in the company four years after I came on board.

Did the question of children play a role in your deliberations?

At the time we were making the decision, we didn’t have any children yet. But of course our desire to have children was a consideration we factored into the decision. We have found a model that works well for us. But I have complete understanding for anybody who may do things very differently. For example, if a professional woman says, I want to concentrate completely on my work. Or another woman who gives up her profession altogether to focus on her children. Every woman and every man – every couple – needs to find the right formula for themselves.

What was your family model?

For the benefit of our four children, my husband and I have reduced our workload in phases. When our first three children were born, I reduced my working time to about 50 percent. Temporarily, my husband has also gone down to 60 percent. Above all, the model we are following is about flexibility.

with genever, and then added their own mix of homemade herbal elixirs. My great-great-grandfather thought the idea of mixed drinks was fantastic, but he found the variability of the mixture unsatisfactory. His solution was to create a prepared beverage whose quality would consistently be the same. “Ready to drink” is what we would call that now – even in German!

And that’s still the case today?

Quality and digestive effect have been part of our product since 1846, and its attractiveness and charisma have been preserved right up to today. Later, it was my grandfather who added another important element. He invented the idea of a small portion as an individual packaging unit and thus ensured the originality of the product to consumers.

Beginning in 1949, the motto “The portion of well-being” was used in a number of variations. Finally, my father achieved diversification for us – and without diluting the core brand Underberg through line extensions. He acquired additional companies and brands, such as the firms Schlumberger and Asbach, and Dettling in Switzerland.

For you, the family business is a living organism, in which values play a role. Do you think there is a difference between a family-run business and one that is not run by a family?

Yes, I think there is. And I’m happy to quote the motto: Ownership matters. Everything depends on the owners, but that doesn’t mean that I believe the family business is the only true model for every sector. In our company, there is a clear commitment to the business on the part of the family.

How do you manage the balancing act between tradition and innovation at Underberg?

Innovation is incredibly important – and especially in a firm

Is there anything dating from this period when the company was founded that has lasted to this day?

Of course. The company’s founder Hubert Underberg recognised two principles, with which he was far ahead of his time, and which are still valid today. First, a striking product design, and second, a maximum of convenience.

Right from the beginning, Underberg chose special packaging for our spirits. So even today, our product still comes wrapped in paper. And because a label is stuck on it, every gastronom or barkeeper back then knew what was in it without unpacking the product. The founder also set great store in what we would now call “convenience”. Back when Hubert Underberg was doing an apprenticeship in the port cities of the Netherlands and Belgium, he noticed that in the pubs by the harbour, people drank mixed drinks. The barmen poured various drinks together, usually

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Photo: PD Underberg

What do the history and tradition of the company mean to you?

A lot. Underberg has a fantastic history. Because this “organism” has existed for so long, the company must have strong genes. The idea of the company’s founder was a simple captivating notion orientated toward high quality and well-being. Ever since it was established in 1846 the company has had a Latin motto: “semper idem.” In English, this means “always the same” – always consistent in quality and digestive effect.

Headquarters of the Underberg Group, in the small town of Rheinberg in North Rhine-Westphalia.

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with such a long tradition, as is the case with us. The family owning the business has to be the company’s engine of innovation. Reinventing the company has to be possible at any time, as Underberg already once proved with its single-portion bottle.

After the Second World War, my grandfather bet everything on this one innovation, by building only a bottling plant for the single-portion bottles. If the market had rejected this bottle size, the situation would have become endangering for Underberg.

Photo: PD Underberg

What is the significance of international business for Underberg?

We have been building up our international business for a long time. We were already active internationally before the two world wars. After 1945, everything had to be rebuilt from the ground up. But now we’re active again in over 100 countries.

With the single-portion bottle: always the same effect and quality

What can you tell us about innovation?

If you want to be truly innovative, you have to fulfil the needs of your customers as optimally as possible.

In the motto of our company, “Worldwide in the service of well-being,” we directly address this desire to meet our customer’s needs. We align our innovations based on this guiding principle.

With everything we do, we want to promote the well-being and pleasure of our customers.

Recently we revised our corporate vision. The main principle derives from a saying of my father: “There is always room for improvement.” At Underberg, understanding this statement unleashes new strengths. Because if you allow yourself to be guided by this understanding, you are always able to accept criticism of the status quo. What is good is still good, but it can and should be improved, at any time, by something better.

It would appear that the blend of herbs in Underberg is one of the world’s last remaining mysteries. Only the family and two priests know the blend. How does it feel to be in possession of this secret recipe?

In this world, where you can experience anything, secrecy is something really fascinating.

Once or twice a month, I go with my parents or the priests to our herb storage facility in Rheinberg. Together we make sure that the blend is right, always consistent. It is important that it is a secret, and not a recipe. Because composing it is a process. Today one often hears that it is important to use both head and hand. We follow these principles when we are working at the herb magazine. We think and we act. At the end of the day, after all, entrepreneurs are not people who shy away from doing the work.

Photo: PD Underberg

Photo: PD Underberg

Last question: What about your own consumption of Underberg? Do you partake of a portion bottle now and then?

But of course I do. After a good dinner, I appreciate an Underberg very much. Wellbeing is important to me, after all.

For decades, Underberg has used classic motifs in its advertising.

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Theme

For more than 50 years, Dimitri has performed on stage. In Japan and China, Europe, North and South America, people everywhere throng to his universal art. Here, we will pay a visit to Europe’s most famous clown – and also its most humble.

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By Urs Thaler

Theme: Artist, nomad and family man

Dimitri and his three families Dimitri has lived for many years in Ticino’s Centovalli.

From this base, the 76-year-old clown heads off to give performances on the stage, both large and small. In October, he appeared in several German cities, playing to full houses everywhere. In November and December, he will be on tour through Switzerland. And 2012? Next year his travels will take him to venues both inside and beyond the Swiss borders. He is a true perpetual motion machine.

Where does the artist get all his energy? What drives him – a man who already reached retirement age eleven years ago and, if he were like all the others, would now be living comfortably as a pensioner? And to this itinerant artist, a man with five children and nine grandchildren, what is the significance of family – especially one he leaves behind as he goes on tour again and again? These are the questions we will ask. On the long journey down to southern Switzerland, memories of Dimitri emerge. Memories of a performance that dates back decades.

Lucerne, Hirschmattstrasse. A winter evening. The shops have all been closed since an hour and a half ago; the usually busy street seems deserted. But wait: there on the other side of the street is a young mother walking with her five or six-year-old son. They are headed away from the center of town. At the end of the street, at the Kleintheater, they both slip through the entrance, drop off their coats in the cloakroom and disappear into the theatre. The lights slowly go down, the performance is about to begin. The boy and his mother managed to get seats right up in front.

The curtain rises. Dimitri takes the stage. This evening he is portraying the “Porteur,” one of the big hits in his solo programme. He premiered this character in Ascona in 1959, and since then he plays him again and again, this bumbling bellboy with a coat that’s too long and trousers too short, in gaudy red socks and a stiff bowler hat.

From the very first second, Dimitri captivates the audience with his presence and the perfection of his poetic play. Ev-

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eryone sympathises with the clown, who finds easy things so difficult. And conversely, everyone feels elated when hard things come to him easily. Quiet as churchmice, they follow his every movement on stage. Suddenly, though the audience is lost in rapt attention, the little boy in the front row starts to laugh. Just like that. It is an innocent, heartfelt child’s laugh. A chortle, a sparkle. The audience is perplexed; no one understands why the little boy is laughing just now. But within seconds, half the theatre is also in stitches. The boy laughed because of the clown. And the audience because of the boy.

And Dimitri? Dimitri paused in his movement, just barely, which is perhaps what made the boy laugh. But now he goes on as if nothing had happened. It does seem, though, as if, from the corner of his eye, he looked down at the child in the first row for a fraction of a second, and the hint of a smile flitted across his face...

A jerk pulls the Ticino-bound traveller from his reverie.

The blue and white Centovalli Railway commuter train has come to a stop. Borgnone-Cadanza is the name of the station. Hop off. Dimitri is waiting.

The first family: the closest circle In his old farmhouse in Ticino, perched slightly above street level, Dimitri opens the door and invites his visitor

Dimitri, 76, is the creator of a highly poetic form of clowning. In his solo programmes, he combines pantomime, acrobatics, tightrope walking, singing, music and an incomparably subtle kind of comedy. He has made extensive tours throughout Europe, as well as in Japan, China, the USA and Latin America. And, of course, time and again he plays all over Switzerland. www.clowndimitri.com More info is available in the illustrated book “Dimitri. Die Welt des Clowns – ein Gesamtkunstwerk” Benteli Verlag, Bern, 2010.

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Photo: Adriano Heitmann, Immagina

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Photo: Archive Dimitri

Photo: Archive Dimitri

Dimitri and his wife Gunda with four of their five children.

The curtain goes up for Dimitri.

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Photo: Archive Dimitri

: Adriano Heitmann, Immagina

< Dimitri and his sister Ninon with their parents and a visitor

La Famiglia Dimitri in New York.

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Theme blue 10/11

into the living room. He goes into the kitchen, returning with two glasses and a pitcher of water. “We have our own spring on the property,” he says. “It gives us the best water in the world.”

At the Scuola Dimitri, today the only college for physical theatre in Europe, Dimitri has taught clowning for almost 30 years. “Now I’ve stopped, because I still want to learn myself,” he says smiling.

Dimitri is someone who perceives the little things of everyday life and rejoices in them. He sees what everybody could see, but not what everybody does see. For example, the gentle falling of a beautiful autumn leaf. The untamed splash and gurgle of a mountain brook that babbles past his house. The flight of birds. The first and the last sunbeams of the day. Yes, the tranquility of BorgnoneCadanza has affected him. It is here where he can recover from his strenuous tours, where new ideas can develop, and where he has found a refuge for himself and his immediate family.

He is currently practising with two lassos. One rope he holds in his hand, the other he puts in his mouth. Then he spins the lassos in a circle, and they turn spiraling into the air around an invisible axis without ever touching the ground. Dimitri trains on this every day for ten minutes.

With two ropes it works very well. But his goal is to get three ropes going – one in each hand, and the third in his mouth. If he manages this, the trick will eventually show up in his act on stage somewhere. And everyone will think that he has already been doing this slick little number for decades, since it is so perfect and elegantly presented.

The start of his career and his marriage came almost at the same time: In 1959, the 24-year-old premiered in his first solo performance in Ascona, and in 1961 he married Gunda Salgo. In 1962 came his international breakthrough as a clown. By 1966, the young couple already had four children. As long as the children were young, he often took the whole family when he was off somewhere on an extended engagement. With his strong sense of family, however, Dimitri is something of an exception on the artists’ scene. Many artists live in their own world; others are egocentric members of a special class. “I do not think it is a given that artists have to be so self-centred,” says Dimitri. True, as a young man, he was also of the opinion that the goal was to be like Picasso, always surrounded by beautiful women, whom the Spanish painter could take at will, without a thought of family responsibilities.

The third family: the audience That leaves the third and largest family of Dimitri, one that is very dear to him: the audience. He says, “I have been given good health, and I’m in shape. I like to play. And I have an audience that appreciates me. In any event, the halls and theatres where I perform are always full.” And then he repeats a sentence he has already uttered once or twice in our interview: “I’m a lucky guy.”

But Dimitri soon realised that such a way of life would be unsuitable for him, and would not fit with his artistic selfconception. “The clown that I imagined and dreamed of being, had to be a human person.” In other words, only a good man can be a good clown. So Dimitri began to work on this assignment. Dimitri’s activity has had a contagious effect on his children. Three of them – David, Masha and Nina – have chosen an artistic career leading them into the theatre and circus as well.

The second family: friends and colleagues Dimitri has been on the stage for over fifty years. Not a single day has gone by that he was afraid his creativity might one day dry up. On the contrary, it continues to bubble forth in abundance. Maybe this is why Dimitri finds ways to let others benefit from his inventiveness. In Verscio, at the entrance to the Centovalli, Dimitri has realised a number of projects. In 1971, for example, he opened the Teatro Dimitri, with an adjoining restaurant, a place where artists and audiences could meet. Four years later, the Scuola Dimitri was opened, then in 2000 the Museo Comico, followed by the Casa del Clown with its Park of Fools. Altogether, these various facilities now employ some 80 people in Verscio, who all belong to Dimitri’s second family.

What would have to happen to the 76-year-old clown for him to no longer consider himself a lucky guy? He reflects on this a moment. Then he says: “For an artist in the comic arts, there is only one thing that is really bad – it would be if people didn’t laugh any more.” He has witnessed fellow artists end up this way. A very sad occurrence. Dimitri has never yet experienced such a thing. If it were ever to happen to him, he would know what to do: stop playing immediately.

What remains are memories Our conversation in Borgnone-Cadanza is coming to a close. Dimitri takes his visitor to the door and raises his hand in farewell. On the walk down to where the Centovalli train makes its stop, a light breeze, barely noticeable, is blowing. From a tall tree, a colourful autumn leaf falls.

As it drifts downward, it turns in spirals, rises and falls, then quietly comes to rest on the ground. The poetry of nature.

Perhaps the autumn leaf has triggered something. In any case, they are suddenly there, the memories of Dimitri’s appearance in Lucerne, more than 20 years ago.

The clown’s performance that day in the small theatre ended with thundering applause. As the clapping slowly faded, Dimitri did something unexpected. He walked all the way to the front edge of the stage, descended the steps into the audience, and approached the five-year-old boy who at the beginning of the show had infected the entire audience with his laugh. Dimitri extended his hand to the child, bowed, smiled and then disappeared behind the curtain.

This raises the question whether Dimitri is not just a clown, but also an entrepreneur. He denies this and laughs: “People have always kept me far away from business activity, and for a good reason: because I understand none of it.” Other people – here he thinks of his wife – are much more talented as managers or organisers than he is, he says. “I’m just the guy who comes up with the ideas.”

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Theme

Representing the fourth generation of his family, Luca Compagnoni runs the family agribusiness operation in Poschiavo in the Grisons.

With his father and grandfather, he produces fine goat cheese and salami, successfully marketing it under the brand “La Rösa”. Our report touches on tradition, innovation and community.

blue 12/13

By Gregory Ingold

Theme: Farming family in the Val Poschiavo

Old tradition – constant change Four generations sit together at the lunch table, prepared by great-grandmother Compagnoni. This farming family from Poschiavo, at the southernmost tip of Switzerland in the canton of Grisons, produces fine goat cheese and salami that is sold under the brand La Rösa. In the family business, Luca Compagnoni works together with his father and grandfather. Even his little boy Mattia is already channeling his two-year-old’s energy into helping out with the chores around the farm. “He helps me feed the goats in the barn every afternoon,” smiles proud father Luca.

Farmers for four generations The farmer enjoys the sense of community he feels within the family. For Luca Compagnoni, the family’s time and work together are central elements of his life. It was always clear to him that he would one day work as a farmer in the family business. After finishing commercial school, he started an agribusiness apprenticeship, specialising in cheese-making. “The nice thing about working as a farmer,” he says, “is the constant change. No two days are ever the same.

The tasks you have to do in the spring are different from the ones you do in the summer and autumn. Also, you are outside in nature a lot and together with the animals.”

The great-grandfather of Luca Compagnoni already looked after a few cows and sheep, alongside the saddle-making business he ran in Poschiavo many years ago. He was a classic “hobby farmer,” still common at that time. It was Luca Compagnoni’s father Andrea who finally devoted himself full-time to farming. In 1981, he built a new stall and bought livestock to fill it. Already 30 years ago he was dreaming of a business concentrating fully on goat products. However, Swiss federal subsidies at that time did not yet extend to goats, so Andrea Compagnoni had no choice but to run a combined operation with cows and goats.

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The final “goatward” step is one that the Compagnonis dared to take only three years ago. The old trading post on Alp La Rösa, a high alpine meadow where the Compagnonis take their cattle to graze in the summer, was being renovated and converted into an inn with restaurant and hotel operations. In a conversation with the new owners, the idea came up that only natural products from the region would be sold at La Rösa – including the goat cheese and salami made by the Compagnonis.

Together they began to build up the brand La Rösa, which served as an umbrella under which Prodotti Capra, the Hotel Stazione della Posta and the Albergo Ristorante are all managed. As part of an exclusive contract, the Compagnonis sell their entire output of both fresh and semi-hard goat cheese and salami to La Rösa. In return, the organisation takes over responsibility for sales and marketing and promotes the hotel and restaurant using La Rösa products – as well as vice versa.

Success has shown that this was a good move. “Within three years, we were able to treble the number of goats from 100 to 300, and in exchange we gave up the cows,” says Luca Compagnoni. “We’re heading in the right direction. We’re still not quite where we want to be. Step by step, we will be expanding the operation.“

Together with his grandfather Andrea and his father Andrea junior, Luca Compagnoni (32) operates a farm in Poschiavo which is completely focused on goat products – fresh and semi-hard cheese and salami. The animals spend the summer on the mountainside at Alp La Rösa.

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Photo: Daniel Martinek

A Poschiavo group portrait, with goats. From left to right: Andrea Compagnoni, great-grandson Mattia, grandson Luca and son Andrea.

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Producing at nature’s rhythm Luca must consciously take one limitation into consideration. As a cheese producer, he can only follow the natural cycle of the animals. Beginning in February, the kids are born. From then until about the end of October, the goats produce milk, and cheese can be produced. During the winter, however, the animals rest – so the dairy does as well.

“To be honest, I’m quite happy in the winter if I can take a couple of months off from cheese-making,” he says with a grin. Winter is also the time to squeeze in a holiday for a few days. Recently, for example, the young farmer took part in a training camp for the local hockey team on which he actively plays, as a hobby. During the season, though, taking a day off is all but impossible. “Being bound like this is a disadvantage of my work,” says Luca. “On the farm, the animals need you, seven days a week.”

Long tradition – but short planning horizon The fourth generation of the Compagnonis, two-year-old Mattia, has already discovered a love for farm work. But whether he will take over the operation from his father one day is a question only the fates can answer now. Set against the long tradition of the family business, going back to Mattia’s great-grandfather’s era, is the short planning horizon of today’s generation. “The market today moves very fast,” says Luca. “Currently, we plan ahead about five years. We have invested heavily in the new stall and the dairy operations, and hope that the collaboration with La Rösa will continue to pay off.”

But predicting how demand will develop is difficult. “Today, goat products are in demand,” he says. “Tomorrow, though, maybe it will be products from camels or llamas.”

The young farmer is aware that with his exclusive goat cheeses, he has found a luxury niche in the market. And even as a farmer with integrated production (IP) in the Valposchiavo, his business will be impacted by developments in the global economy, the strong Swiss franc, the purchasing power of customers, or the agricultural policies of the federal government. And he must react accordingly – and reorientate the business if necessary.

Of course, the career choices his son Mattia will make are still in the distant future. “I would be very happy if he would show enthusiasm for agribusiness,” says Luca. But in no way will he put pressure on his son to do so. If the boy wants to become a lawyer, mechanic or a professional ice hockey player, Luca says that would be fine with him, too.

Family ties are an advantage For Luca Compagnoni, working in a family business is ideal. “We have a very good relationship and like to work together,” he explains. “Of course, from time to time, we have differences of opinion where it can be difficult to agree. But so far we have always overcome these situations.” On the contrary, he sees the family ties as an advantage when it comes to working and finding solutions. “We stick together – even in difficult times – and keep working until we’ve found a solution and reached the objective. We don’t spend much time looking at the clock. Overtime is not an issue.”

Working together, Luca and Andrea Compagnoni are each able to contribute their respective skills. Compagnoni père works in various aspects of the business where he can call

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upon the richness of his experience, while Luca is more open to current developments and likes to experiment with new things. For example, Andrea Compagnoni considers today’s fully computerised tractors a horror. Dividing up the roles each will play is no problem for either father or son; each knows he will take on the job of both boss and underling at the same time. Officially, they both manage one operation each, and are currently working on a legal structure to organise themselves into a so-called generational collective. Will the son ever feel that it is too much to always have family around him? “No!” laughs Luca. “After all, we don’t live together. In the evenings, we go our separate ways.”

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Tolerance, honesty and thorough work: these are the core values that his father has passed on to him. What is important, he says, is that disputes are settled fairly, so that afterward everyone can look each other in the eye.

To Luca, these values also play a central role when it comes to life in the village – life with his extended family. In the small village of Poschiavo, everyone runs into everyone else all the time. People depend on each other.

His family is anchored here; they have run their family farm here for four generations. Even if Luca had not become a farmer, he would certainly have remained in Poschiavo. “This is where I am at home; I know the people here,” he says. “We’re a community and we help each other.” Among the close friendships built up here are those formed in the local hockey club. His friends also support him when it comes to carrying out a crazy idea now and then. For example in the summer of 2010, they completely cleared one of the goat stalls and lovingly decorated it for the wedding of Luca Compagnoni and his wife Fabiana.

La Rösa – products from the region, hotel and restaurant A few minutes away from the Bernina Pass in the canton of Grisons, Alp La Rösa, situated 1,880 metres above sea level, beckons with an array of special treats. The southern-style duet of restaurant and post office-cumtrading post provides the finest goat cheeses and salamis, enriching any table.

La Rösa is also a brand name used by the restaurant Albergo Ristorante, the Hotel Stazione della Posta and Prodotti di Capra – goat cheese and salami – produced exclusively by the Compagnoni family from Poschiavo. The hotel and restaurant are operated only in the summer, from midJune to mid-October. Just three years ago, this former postal and trading station was renovated, and now offers eight guest rooms. Great care was taken in the renovation process to retain the original character of the buildings. Guests who stay at La Rösa also experience a journey into the past, thanks to its rustical, wood-paneled rooms, the rich plasterwork in the dining room, two nostalgic bathrooms, as well as its cheese and wine cellar. The Albergo restaurant serves typical Italian and local Valposchiavo cuisine, as well as fresh venison in the autumn, delivered by local hunters. Chef Livio Tuena puts special emphasis on the use of local products. www.larosa.ch

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Photo: Daniel Martinek

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Theme

The sun rises in the east and sets in the west. Is this also true of family values? It would seem so, as some startling vignettes reveal. But there are also some darker aspects.

blue 16/17

By Angela Obrist

Theme: Families elsewhere

The Far East: keen on family values

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Men are like dust Unusual inheritance laws prevail among the Minang people of Indonesia. As reported by the British anthropologist Nigel Barley, the Minang’s magnificent old wooden houses, called Rumah Gadang, are considered to be their most precious possessions. Whilst portable assets belonging to both sexes can be inherited, the costly houses, including their rice fields, may only be bequeathed to women. Men remain vagabonds: Without a fixed roof over their heads, they wander through the country, trying to earn money so that they can marry a woman with a house. Even if they are successful, a wife’s house is a home for the husband only until dawn. That is when he has to leave again, returning in the evening to ask his wife once again if he can stay for one night. As the saying among Minang women goes, “Men are like dust.” And if dust bothers you, just blow it away.

Photo: Tropenmuseum.nl

Photo: Keystone

Children: few here, many there To maintain the population of a country in long-term equilibrium, an average of 2.1 births per woman is necessary. Families in Western countries have not attained this average for many years, which is why, in the long run, these countries’ populations are shrinking. For example, in the year 2050 it is likely that Germany will only have a population of less than 75 million. At that point, the number of 60-year-olds will be twice as high as that of newborns. Spain, Italy, Austria and Switzerland are facing a similarly steep decline in their populations. But there are countries whose birth rate is significantly above 2.1 children per woman. As a consequence, the relative size of countries will change dramatically in the future. Among the winners will be countries such as Pakistan (348 million people in 2050), Indonesia (293 million), Iran and Vietnam (each over 100 million). In four decades, even Yemen will have a larger population than Germany. And India, with 1.5 billion people, will have overtaken China’s population of 1.4 billion.

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Where the girls aren’t For demographic reasons, many men in the Far East wishing to marry cannot find a bride. That is because approximately 163 million women – exactly twice the number of people living in Germany – are missing from the population. The ratio of boys to girls around the world is usually about 105 to 100, whereas in India this ratio is 113 to 100. In certain provinces in northern and southern China, there are even 130 boys to 100 girls. Since male offspring earn more and ensure the continuity of the family line, parents in India and China traditionally prefer boys in their family planning. Experts estimate that in 20 years this will result in many parts of these countries in populations consisting of up to 20 percent more men than women.

Photo: Reuters

Photo: Keystone

A family with 167 members Presumably the biggest nuclear family in the world lives in the village of Baktwang in the Indian state of Mizoram, comprising 167 individuals. The Chana family thus has nearly twice as many members as the Berlin Philharmonic Orchestra. Sixty-seven year-old Ziona Chana is the paterfamilias. He lives with his 39 wives, 94 children and 33 grandchildren in a house with more than 100 rooms.

A family feeds a thousand mouths, while the lonely must suffer great hunger. Chinese proverb

Photo: Japan-Photo.de

Photo: Getty

Building and singing for love The search for a partner is challenging not only for us humans, but sometimes in the animal world as well. Some male animals display extraordinary talents to impress the females. For example, the silk bowerbird of eastern Australia sets store in his architectural expertise. Using twigs, he builds an arbor on the forest floor, always constructed in a north-to-south orientation. This he then adorns with colourful objects such as snail shells, flower petals, feathers and insects. No snob, for his work of art he is just as happy to make use of civilisation’s cast-offs, like shards of coloured glass or pieces of plastic. Singing loudly, the male then struts before his house to attract a female. The bowerbirds with the best chances are those who master both the vocal aspects of the mating game as well as a certain sophistication when it comes to architectural skills.

The oldest family business in the world Japan’s Hotel Houshi is the oldest family-run business in the world – it was established exactly 1,293 years ago.

The hotel is located in Awazu Onsen in Ishikawa Prefecture, and is now managed by the 46th generation of the family. What is the secret to its longevity? A harmonious family life? Quite possibly. But maybe the family owning the hotel has simply stuck to its motto: “Watch out for fire, learn from water, cooperate with nature.” According to legend, the hotel owes its existence to a divine desire: in the year 717, there appeared to the Buddhist monk Taicho Daishi a mountain god who sent him to the village Awazu to find a fountain of healing waters hidden there.

The monk actually did find the miraculous fountain, and in the following year, 718, the Hotel Houshi was built alongside it. Surprisingly, it was only five years ago that this hotel became the world’s oldest family business. Until then, the honour belonged to the Japanese company Kongo Gumi, which specialised in the construction of Buddhist temples. It was sold in 2006 because of economic difficulties – after exactly 1,428 years of family ownership. www.ho-shi.co.jp

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Photo: Istock

The European debt crisis shaped 2011. Economy and financial markets remain the great unknown for 2012.

Will the crisis successfully be contained and credible steps taken toward fiscal union?

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Macro

By Dr. Thomas Steinemann, Chief Strategist, and Dr. Ralf Wiedenmann, Head of Macro Research at the Vontobel Group

blue 18/19

Macro:

The global economy: a review of 2011 and the outlook for 2012 The economy and financial markets in 2011 were primarily shaped by the European debt crisis. In the context of our main Euro scenario “Muddling Through,” we are expecting a further slowdown in the global economy for 2012, but not a recession. In an environment characterised by uncertainty, defensive equity strategies such as valueoriented shares (“value”) and “dividend pearls” should pay off. Only if the debt crisis in Europe is contained, and sustainable steps toward fiscal union are taken, will 2012 be a good year for equities. Given the deflationary environment and the continued expansionary monetary policies of major central banks, interest rates will remain generally low, and in the face of their historically low levels are likely to rise again only slightly. In this globally low-interest rate environment, emerging-market bonds appear to be a sensible addition to the bond portion of an investment portfolio.

Italian government bond yields Source: Vontobel, Thomson Datastream Euro-summit July

Euro-summit Oct.

7.5 7.0 6.5

Japan’s economy picking up steam after tsunami disaster The catastrophe that befell Japan in March (earthquake, tsunami, meltdown) led to a slump in the Japanese economy during the first half-year. Since then, however, a large part of the country’s infrastructure has been restored to operation, and power cuts are now a thing of the past. Japan’s exports have risen every month since May. The country is benefiting from its proximity to its major Asian trading partners, which despite the slowdown are still recording fairly robust economic growth. Given these factors, we foresee economic growth of around 2.5% for Japan in 2012.

Europe: from one crisis summit to the next In contrast, in the Euro-zone the economy in the first quarter was robust at first. But starting in July, the yields on Italian government bonds began to rise. Triggering this was the discussion of “voluntary” debt forgiveness by the private creditors of Greece – i.e. the banks and insurers. In August, Italian interest rate broke through the 6% barrier. Since then, the European Central Bank (ECB) has bought 100 billion Euros of Italian government bonds. In doing so, however, they only managed to provide some stop-gap help; Italian yields shortly headed back up again.

A further Euro-summit was convened in late October, and here, three points were decided: 1. The recapitalisation of European banks 2. “Voluntary” forgiveness by private creditors who would agree to a 50% debt reduction 3. Leveraging the EFSF to increase the available volume But even this most recent crisis summit was unable to reverse another increase in the yields on Italian government bonds.

6.0

The economic downturn in the periphery has now infected the EU’s core countries. France was forced to adopt further austerity measures to meet its budget targets. Even in Germany – after the financial crisis, the economic engine of Europe – the economic climate is becoming murkier.

5.5 5.0 4.5 Jan

Feb

Mar

Apr

May

Yield on 10-year Italian government bonds

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Jun

Jul

Aug

Spt

Oct

The Euro-zone will just barely escape a recession. In our main scenario, we assume that to some extent, the Euro crisis can be controlled (“Muddling Through”). The last

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summit decided that from the end of 2011, newly issued bonds would be equipped with an “insurance policy.”

This should allow the yields on Italian government bonds to ease somewhat – but to what level, however, remains to be seen. A sustainable level of interest rates – one that Italy could afford – would be around 3.5%.

Switzerland: declining purchasing managers index is signalling stagnation

And what about Switzerland?

Although the Swiss government’s finances are in excellent shape, the Confederation is nevertheless being pushed to the brink of recession as well. In addition to suffering because of the weak economy in its main European markets, Switzerland is struggling because of its strong currency. In September, shortly after the Euro flirted with parity with the Swiss Franc, the Swiss National Bank was able to avert the worst by setting a lower limit for the Euro of CHF 1.20. We expect that this lower limit will be maintained.

Sentiment among purchasing managers has nevertheless deteriorated markedly. In 2012, the Swiss economy is therefore not likely to grow by more than 1%.

60

Source: Vontobel, Thomson Datastream 6

70 65

4

55

2

50 0

45 40

-2 35 30

-4 2005

USA: budget consolidation only in cosmetic doses In the summer, the US debt ceiling was raised to USD 900 billion in a true political nail-biter, and at the same time, spending cuts of about USD 900 billion to be made over the next ten years were also agreed. A bipartisan committee of Democrats and Republicans is to propose additional savings of USD 1.5 trillion, to be approved by Congress by the end of 2011. On a per-year basis, this level of budget savings amounts to only 1% of Gross Domestic Product – not overly ambitious. Following weak economic growth in the first half of 2011, the US economic indicators in the second half of the year have improved. For next year, we are expecting economic growth of up to 2%, which is above the European growth rates.

2006

2007

2008

2009

2010

2011

Purchasing managers’ index Real GDP (% vs. previous year, right-hand scale)

Euro-crisis led to a flight to quality The ongoing uncertainty regarding the solution of the European debt crisis led to a flight to quality. The yields on government bonds of the United States, Germany and Switzerland reached new lows. In 2012, we expect only a slight increase in yields on government bonds, because the economy will only slowly recover. Moreover, in many countries the unemployment rate is high, which is dampening inflation.

In addition, following the financial crisis, both private households and the banking sector are still busy trying to reduce debt.

The public finances of most of the emerging economies are much more solid than those of the developed countries.

Emerging markets: first interest rate cuts The economies of most of the emerging markets are quite robust. Some economies in Asia experienced only a slight slowing of their growth rate, or were even able to maintain growth at the same pace as before. Currency devaluations in the emerging markets in 2011 are the consequence of the decreasing appetite for risk due to the European debt crisis. This led to slightly rising risk premiums on emerging market bonds. From a fundamental viewpoint, however, these devaluations and rising risk premiums are not justified, because the public finances of most of the emerging economies are much more solid than those of the developed countries. Their foreign debt is low, and their currency reserves are high. In 2012, we are therefore expecting a recovery in the prices of emerging market bonds and their currencies. Added to this is the fact that inflation has already peaked. The central banks of some of the emerging countries have therefore already begun cutting interest rates, for example in Brazil and Indonesia.

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While the stock market performance since September has been cause for some hope after August’s correction, overall, shareholders have suffered significant losses on their equity positions in 2011, particularly in Europe. US equities managed to maintain their price levels, however, as could certain defensive sectors like non-cyclical consumer goods and healthcare.

The largest losses were suffered by investors in the sectors finance, basic raw materials and cyclical consumer goods.

Financial markets outlook for 2012: two big challenges The financial markets in 2012 will be dominated by two issues: 1. What will the positive, but below-average, global economic growth mean that we are expecting next year?

2. Will it be possible to overcome the Euro-crisis by introducing credible and sustainable measures?

In addition, in November 2012, the US presidential election will take place. But given the other global challenges facing us next year, the importance for the markets of the election should be relatively small.

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Macro blue 20/21

The significance of the modest economic outlook ... ... for bonds For the bond markets in safe countries such as Switzerland and Germany, our outlook for modest economic growth is rather good news – but for those of the European periphery, it’s rather bad news. Reducing debt and thus saving public expenditure will once again be one of the dominant themes of the new year. In such an environment, the monetary policy of the central banks in the developed countries will remain expansionary. Mario Draghi, the new head of the European Central Bank (ECB) is likely to continue cutting interest rates in Europe. That will also keep the interest on German government bonds low. In this sense, the general public is still misjudging expansionary monetary policy, believing that central banks recklessly put up with high levels of inflation from time to time. They fail to remember that historically, financial crises have always been deflationary and not inflationary in nature. The reason for this is that financial crises always entail debt reduction – also called “deleveraging.” This process can take place in private households, as is currently happening in the USA; in corporations, as in Japan since the 1990s, or at the government level, as is happening today in Europe. With debt reduction, it’s always about saving, which brings with it deflationary tendencies. As long as debt must be reduced, expansionary monetary policy is sensible.

For investors holding Swiss and German bonds, this low interest rate environment promises only very low returns.

A meaningful diversification of the bond portion of a portfolio can be achieved by adding bonds from the emerging markets into the mix. Their sound public finances, low government debt and, on the horizon, the end of increasing inflation rates are all reasons why bond yields in countries such as Thailand, China or Indonesia, will ap-

Vontobel Fund – Emerging Markets Bond The Vontobel Fund – Emerging Markets Bond offers investors the opportunity to participate in the long-term development of the currency and bond markets in the so-called emerging markets in Asia, Eastern Europe, Africa and Latin America. Many of today’s emerging economies are likely to be the established markets of tomorrow. The traditional view that emerging markets are a collection of crisis-ridden countries has had to be revisited in the past few years. Many have emerged stronger from the crises of the 1990s, having implemented needed economic and political structural reforms. Of course there are still some incorrigible “black sheep” to be avoided in order instead to focus on candidates whose creditworthiness is developing well and who also have the potential to post a positive development of the value of their currencies. We are investing not only in the “usual suspects” such as Brazil, Russia, India and China (BRIC), but also in markets that are currently receiving less attention, for example the Philippines, Thailand, or Colombia, and we are also exploring new promising markets, such as Namibia. This contributes to the diversification of the fund, which primarily invests in bonds issued by governmental, semi-governmental or supranational issuers in the respective emerging market currencies – not in USD. The fund’s average rating is currently BBB+ i.e. in the investment grade range. Active currency management is the core element of the fund’s risk management approach, which aims to keep the volatility of the fund’s performance comparably low.

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proach the local interest rates, giving us reason to expect outperformance on their part. Our Vontobel Emerging Market Bond Fund could represent a suitable investment vehicle for such bonds (see box). ... and for equities What can we expect from the stock markets in 2012?

Here it is important to distinguish between the array of fundamental equities data on the one hand and the Euro-crisis as a catalyst superimposed upon these data, on the other. The fundamental situation is as follows: in 2011, European equities experienced dramatic price corrections. Shares are now much cheaper than a year ago.

Thanks to these price reductions, and lower interest rates, risk premiums on the stock markets have soared, which makes equities appear much more attractive compared to bonds. Looking at corporate earnings next year, with the weak economic situation it is reasonable to expect earnings growth of only about 10%. While analysts have already adjusted their earnings expectations for European companies largely in this direction, the expectations for the US stock market are a lot more ambitious – and thus more susceptible to downward corrections.

Can the Euro-crisis be contained in 2012?

The big unknown, also for 2012, remains the Euro-crisis.

Will it finally be possible to successfully implement credible measures toward a lasting solution? To that end, decisions will need to be taken at least in the direction of a fiscal union; better still, a political union. This will have to be accompanied by debt limits in each country, as well as punitive measures that are tough enough if the Maastricht criteria would be exceeded, that they would never be violated in the first place. In the short term, the ECB should get over its institutional timidity in 2012 and bring interest rates down in Italy by buying bonds, aiming for well below 6% – better yet, below 5%. But by doing this, one is only treating the symptoms; a sustainable solution can only be achieved by cleaning house in terms of government budgets and debt levels. But if, before a conclusive solution can be found, Italy is cut off from the capital markets by its excessive interest rates, then all the efforts will be for nothing: if Italy falls, the Euro will fall, and the effects on the global economy and financial markets will be devastating.

If these various measures are tackled seriously and convincingly, an acceptable year for equities lies ahead of us.

If not, we will have to endure “more of the same” as we did in 2011.

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Opportunities blue 22/23

Elegant timepieces from Swiss manufacturers not only look good on the wrist. In the portfolio of investors, shares of the respective watch companies could also be a real eye-catcher.

By René Weber, Analyst Luxury Goods/Food & Beverage, Vontobel Research

Opportunities: Luxury goods for the portfolio

The Swiss watch industry continues to soar

HONG KONG USA

20

%

21

.8

%

.7

1.9

10.4%

3.7

3.4

2.1

4.6

6.0%

5.5

4.6 UK UAE JAPAN GERMANY ITALY

%

154738_Blue_IH_E.indd 22

OTHERS TAIWAN SOUTH KOREA

3%

30 percent of Swiss exports go to “Greater China” Looking at the development of the Swiss watch industry over the last ten years, it is particularly notable that the major importing countries have changed significantly. Whilst in 2000, the USA was the industry’s biggest market, since 2008, Hong Kong has been the clear Number One. In 2010, already 21 percent of the exports went to Hong Kong.

China currently ranks third behind the USA, reaching a share of 8.3 percent in 2010, compared to 2000, when only 0.2 percent was exported to China. Overall, over 30 percent of

(to September)

8.

No luxury goods industry without Swiss watches The global luxury goods industry encompasses leather bags, accessories, perfume/cosmetics, jewellery and, of course, watches. The share accounted for by watches is about 14 percent, with the bulk of it coming from Switzerland. The Swiss watch industry, with around 50,000 employees in over 600 companies and an export volume in 2010 of CHF 16 billion, is the third most important export industry for Switzerland (no. 1 is the chemical industry; no. 2 the machine industry). The majority of exports (72 percent) is made up of high-quality mechanical watches, and this proportion has been steadily increasing in recent years; for example, in the year 2000 it was just 52 percent. The average price (export value) of a Swiss mechanical watch is CHF 2,200.–, compared to CHF 200.– for an electronic or quartz watch.

Swiss watch exports: 2011

7.0

Over the past few years, the global luxury goods industry has recorded steady growth, interrupted only by external crises – 11th September, SARS, and the financial crisis. So in the crisis year 2009, a significant decline was to be expected.

But the industry already managed to make up for it in the following year. In the current year, its rapid growth has continued and we are assuming that new record levels will be reached. Above all, it is the Asian markets that are contributing to this excellent growth story, as they have experienced a comparatively weak impact from the effects of crisis.

CHINA FRANCE SINGAPORE

Source: Swiss Federal Customs Administration

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Jaeger-LeCoultre Grand Reverso Ultra Thin tribute to 1931 Price: CHF 23,000

Omega Ladymatic Price: CHF 6,000 –33,000 (depending on diamonds)

Swiss watch exports go to the region of “Greater China” (i.e. Hong Kong, China and Taiwan). In the current year, Swiss watch exports increased by nearly 20 percent through September, with Hong Kong increasing by 29 percent and China by as much as 48 percent. But other markets achieved double-digit growth rates as well, such as the United States with 21 percent. In Europe, sales grew by an average rate of 10 percent, with France, the largest individual market, rising by as much as 16 percent. One positive surprise was Japan, which recorded a sales increase of 11 percent since the beginning of the year, despite the Fukushima disaster (Source: Swiss Federal Customs Administration).

The measure of all things The Chinese consumer has become more important as a tourist as well. A large part of sales generated by the luxury goods industry in Europe is made to Chinese visitors.

Due to the strong Swiss Franc and the price increases this has brought about, a Swiss watch has certainly become more expensive for foreigners, but in spite of that, in the watch sector, Switzerland is still considered the measure of all things. A survey of Chinese consumers by the consulting firm KPMG (see page 24) shows that 87 percent of the respondents prefer Switzerland (Swiss Made) as the country of origin in the product category “watches.” It is therefore not surprising that the exchange rate is of great importance for the Swiss watch industry, as most of the costs are incurred in Swiss francs, whilst sales are recorded in Euros (about 40 percent) and, in America and Asia, in US Dollars (up to 50 percent). The strong Swiss Franc thus has a negative impact on the operating margins for the Swiss watchmaker. This effect is compensated, in part, by price increases of between 5 to 10 percent.

Watches, Asian style The high value of the Asian clientele is also reflected in a trend that can be observed in new Swiss watch launches.

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Patek Philippe Ref. 5270 Price: CHF 145,000

In the last few years, classical watches were the main focus, but also ultra-thin models which correspond primarily to Asian tastes. Watch manufacturers also introduced various watches on the market with mechanical movements from their own factories – a suitable means to stand out from the competition. Above-average demand is being felt in the high-price segment. “Limited editions” or complicated movements are very popular. Women also wear more mechanical watches, which may well include diamonds in their manufacture.

Industry consolidation foreseen In June of this year, the Swiss Competition Commission (WEKO) opened an investigation to identify whether the announcement by the Swatch Group that they would no longer supply certain components for mechanical movements violates antitrust laws. As a preliminary arrangement, it was decided that in 2012, the Swatch Group would reduce the supply of mechanical movements by 15 percent and the supply of assortments (i.e. central parts of the movement: escapements, mainsprings, pallet forks) by 5 percent. For a number of Swiss watch producers, these measures would mean a massive increase in the cost of production, as they are still dependent to a large part on the Swatch Group for their supply of these components.

It is assumed that an agreement will be reached defining certain transitional periods. However, certain watch brands will not be able to afford the requisite investment after their supply is cut, and this will lead to further consolidation in the industry. In this way, for example, Girard-Perregaux and Maurice Lacroix had to give up their independence this past year.

Golden times ahead for the Swiss watch industry The signs remain positive for the Swiss watch industry, and it may be assumed that growth will continue. Asia will play a central role in this development. For the moment,

04.12.11 18:24

Chinese consumers: Preferred source countries by product category (in% of responses)

CHINA

FRANCE

37 33 %

FRANCE

35

%

ALCOHOL 13% 7% 4% 2% 2% 0%

43

%

FRANCE USA CHINA UK HONG KONG JAPAN SWITZERLAND

37

%

30% 10% 7% 6% 6% 3% 1%

ITALY HONG KONG CHINA UK USA JAPAN SWITZERLAND

Source: KPMG, “Luxury Experiences in China”, May 2011

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LEATHER GOODS 9% 8% 7% 6% 5% 1%

26 % 25

FRANCE

%

UK HONG KONG CHINA USA SWITZERLAND JAPAN

JEWELLERY 16% 10% 9% 9% 4% 1%

ITALY UK CHINA SWITZERLAND USA JAPAN

76

SCHWEIZ FRANCE

CLOTHING

31

%

HONG KONG

ITALy

19% 10% 9% 8% 7% 2% 2%

ITALy

FRANCE

UK ITALY USA HONG KONG SWITZERLAND JAPAN

SHOES

%

%

COSMETICS/PERFUME

SWITZERLAND

87

%

5% 5% 4% 3% 3% 2% 1%

HONG KONG USA JAPAN ITALY UK CHINA SWITZERLAND

WATCHES 3% 2% 2% 2% 2% 1% 1%

HONG KONG CHINA FRANCE ITALY UK JAPAN USA

04.12.11 17:46

Opportunities blue 24/25

other larger countries are still completely unimportant. This is especially true for India (which accounts for only 0.6 percent of exports) and Brazil (0.3 percent). This can be explained by their high luxury product taxes/import duties.

However, these countries also illustrate how much further growth potential exists. Even if the current high growth rates would begin to slow down, luxury goods – and thus also the Swiss watch industry – are an absolute must in an investment portfolio.

Swiss watch industry: brand/price positioning (Swatch Group, Richemont and LVMH are listed companies)

Swatch Group

Richemont

CHF > 10,000

Breguet Blancpain

A.Lange&Söhne Piaget Vacheron Constantin Roger Dubuis

CHF 7,000–10,000

Jaquet Droz Glashütte Original

Jaeger-LeCoultre IWC Ralph Lauren

Hublot

Rolex Harry Winston Corum Parmigiani Chopard

CHF 3,000–7,000

Omega

Cartier Officine Panerai Van Cleef&Arpels

Zenith

Concord Eberhard

Montblanc

Chaumet Louis Vuitton Bulgari

Breitling Ebel Maurice Lacroix Carl F. Bucherer Oris

Baume&Mercier Dunhill

TAG Heuer Dior

Movado Raymond Weil Hermès

CHF 1,500–3,000

CHF 500–1,500

Longines Rado

CHF < 500

Tissot cK Watch Pierre Balmain Certina Mido Hamilton Swatch Flik Flak

Source: Vontobel Equity Research

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LVMH*

Price

Others Patek Philippe F.P. Journe Franck Muller Girard-Perregaux Ulysee Nardin Audemars Piguet Greubel Forsey Richard Mille

Sector Festina Gucci Mondaine Victorinox Hugo Boss

*Louis Vuitton Moët Hennessy

04.12.11 17:46

Blue Pages blue 26/27

Blue Pages

News from the Vontobel Group Vontobel has a new base in Dubai

Vontobel Portfolio Manager recognised

The Vontobel Group is opening a Private Banking office in Dubai with the goal of looking after high net worth individuals from the region. In addition, Vontobel is now establishing its proven expertise in structured products with a specialist team. Private Banking activities will be carried out under the leadership of Ramzi Charaf, an experienced Private Banker who joined the Vontobel Group with his team in the summer of 2011. Bank Vontobel (Middle East) Ltd. has a Category 3 licence from the DFSA (Dubai Financial Services Authority) and is headquartered at Liberty House in Dubai.

At this year’s “Sauren Golden Awards” in Frankfurt, Rajiv Jain received two gold medals for excellence in fund management in the categories “Equities – Emerging Markets” and “Equities – Asia excluding Japan.” Ed Walczak was awarded a gold medal for his excellent fund management in the category “Equities – USA.” According to Sauren, two gold medals means a very large probability, and one gold medal a large probability, that performance over the long term will be excellent.

National Future Day – girls and boys change sides for a day On 10th November, girls and boys from grades 5 through 7 accompanied their fathers, mothers or another closely related person during a day at work. For the sixth year now, Bank Vontobel has offered the children of its employees the possibility to learn about the world of work in a bank. Future Day is meant to encourage everyone to sweep away pre-conceived notions in their career choices and begin to develop confident career ideas early on.

Best bond fund manager in Switzerland At the Feri EuroRating Management Awards ceremony in Germany, Vontobel took centre stage. In November 2011, the European rating agency Feri EuroRating Services AG and the news channel n-tv recognised Vontobel as the best asset manager for bond funds in Switzerland.

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Current monograph from the Vontobel Foundation series one who has reYouth has its own languages. Any elf, and probably mained young remembers this hims styles, rhythms, with great pleasure. Words, phrases, nyms: this is how we and also intonations or cheeky acro tentionally, other expressed ourselves – sometimes unin overall reproach: times deliberately and decisively. The Angelika Overath slang. “Sprachen der Jungen” by flawless German reminds us that times change, and rated by Madlaina has long since ceased to exist. Illust of charge at Janett. Copies may be ordered free . g.ch ftun www.vontobel-sti

Vontobel receives award as “Best Private Banking Boutique”

Vontobel recognised for “Best Wealth Management Advisory in Switzerland 2011” In November 2011, Vontobel Private Banking received the award for the “Best Wealth Management Advisory in Switzerland 2011” from the prestigious industry magazine “Global Banking and Finance Review.” The award is given for first-class investment advisory service and for a structured, holistic advisory process. It honours the interaction of powerful information technology in combination with the expertise of experienced client advisors. Peter Fanconi, Head of Private Banking, said, “It fills us with pride that the excellence of our investment advisory has been confirmed by an independent panel of experts.”

Private Banking at Vontobel Group has been recognised as “Best Private Banking Boutique” by the prestigious trade publications “Professional Wealth Management” (PWM) and “The Banker,” which belong to the Financial Times publishing group. The Global Private Banking Awards are presented in various categories to leading institutions in the financial sector that have distinguished themselves by their high quality standards. They also reflect the new reality in the asset management industry and reveal which financial institutions have recognised the signs of the time, aligned their business models early and are meeting changing client needs with viable solutions.

Three years of Global Change Investing Global Trend Investing, one of Vontobel’s global product lines, is celebrating its third birthday. The products offered in this boutique focus on two main themes. With the “Global Trend” funds, investors take advantage of long-term trends such as new solutions for meeting the increasing demand for energy and natural resources, as well as clean technologies. The “Global Responsibility” funds target undervalued companies that have a high appreciation potential from the perspective of Vontobel Asset Management thanks to their clear compliance with environmental, social and governance standards.

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04.12.11 17:46

Care & Share

By Renata Fäh

blue 28/29

Care & Share: Sustainable aid for Africa

Education for the future of Uganda

With the goal to start a charitable project?

At age 40, I decided to initiate a project to help alleviate poverty in Africa. Before I founded UECD, I had already tried out a lot of other approaches. For example, in Ghana I recognised some entrepreneurial talent in a woman I met.

In New York, I bought her a machine for making peanut butter. With this machine, she could deliver to restaurants and hotels and earn a living. Unfortunately, the machine was never put into operation. Instead, it degenerated into an oddity for the villagers to look at. I learnt a lot from that.

Are you satisfied with the development of the UECD project?

With UECD, I started on a small scale. I myself supported a young woman and man from Uganda, so they could complete their studies. She was a midwife, and he practised as a lawyer. After graduation, the two of them wanted to give something back. Today, they each follow another student as junior consultants on the board. They also maintain contact with local colleges and identify students we can support. All this can work only if people are also engaged on the ground. you give others so much responsibility in this way. What has been your experience with this approach?

So far we have had only positive experiences. We not only select our students carefully, we also conclude a contract with them and their families. In this contract, they promise that they will use the money exclusively for their studies, otherwise we will withdraw our support immediately. Each student manages his money himself and gives an accounting of it to his sponsor.

154738_Blue_IH_E.indd 28

Eva Winizki is an organisational psychologist and the initiator of the organization “UECD”.

UECD – Uganda Empowerment & Career Development The association UECD supports disadvantaged, motivated young Ugandans by sponsoring their professional training or studies. After completing their education, they undertake to follow the next generation of students as junior consultants. UECD attaches great importance to a fair selection, giving women special consideration. This is because in everyday life, at work and in politics, they do not benefit from equal rights and opportunities. To support the association, there are three options: A full or partial sponsorship, or through donations.

Photo: Eva Winizki

Ms. Winizki, where does your passion for Africa come from?

In the mid-1950s, the trade with African art objects was booming. My father was a passionate collector. So as a child I already came into contact with Africa and experienced something of the continent this way. But it wasn’t until much later that I actually traveled to Africa for the first time.

That sounds like a solid foundation. Have you succeeded with the project you undertook at age 40?

We are well on our way. But in order for us to be able to support two students every year, we are dependent on donors. Our primary goal now, in addition to finding sponsors from Switzerland, is to find privileged individuals in Uganda as well who will engage themselves for the future generations in their country.

Photo: Sandro Diener

Eva Winizki’s father was an avid collector of African art objects. In her parents’ house, art dealers were always coming ad going when she was a child. Even today, she still remembers the smell of the sculptures that originated from the country where, later, she would engage herself so deeply. On her 40th birthday, she decided to develop a project to help alleviate poverty in Africa. With “UECD,” she has created one that is already bearing fruit.

Contact: info@uecd.ch, www.uecd.ch Donations: PC 46-110-7 IBAN: CH03 0839 0030 0212 1000 7

04.12.11 17:46

Column: Dr. phil. Manuel Bachmann

Family as the elixir of life to make ourselves secure. Without recognition, we do not know who we are, who we want to be, and who we could be. You could also say that without recognition, we do not exist. And figuratively speaking, our very first sips of this elixir of life are within the bosom of the family.

Dr. phil. Manuel Bachmann is a Lecturer and the Head of Studies of the Executive Master’s Programme “Philosophy and Management” at the University of Lucerne, as well as an Instructor at the University of St. Gall. He publishes a monthly e-magazine for decision-makers called “absolutum”.

Arnold Schwarzenegger has indirectly attributed his boundless ambition to a formative experience of his childhood: the disrespect of his father, who introduced the principle of competitiveness into his family in the form of competition between family members. Continuously defeated by his older brother, the young Arnold considered family a living hell. For him, what was missing was the thing that makes a family different: unconditional recognition in a competitive-free living environment – one where love has nothing to do with performance.

Disrespect is such a hurtful experience because it takes away our oxygen; we cannot breathe. It is one of the major theses of the great philosopher G.W.F. Hegel that recognition is the true elixir of life. We do not want money, success, power. We want recognition. And if we do strive for money, success, power, it’s only because we are looking for something greater than these three: recognition by others. Recognition is the real driving force that lies behind all our other motives. Recognition means that people want to feel that others affirm and respect them and encourage them in their goals. That is why we all fight earnestly, if necessary even to the death. Because recognition allows us

154738_Blue_IH_E.indd 29

That is because the family lies within the first circle of recognition. Recognition in terms of equal rights, and recognition in terms of our values and lifestyles form the second and third circles. All three encircle our entire social lives, making us people who want to live and can live.

As the first circle of recognition, family means that we give each other recognition solely due to our close relationship; based on natural belongingness and love.

This is not to be misunderstood as a romantic idealisation. Indeed, this circle makes very demanding claims on us, which can make reality all the more terrible if they remain unfulfilled. We condemn disrespect within the family as morally hard, whether it manifests itself through neglect, abuse or rape. Conversely, the respect that we experience in the family gives us courage to face the struggle for recognition in the second and third circles. Outside the family, we fight for rights, values and common goals. Through these circles, we enter into the community of human society.

But the starting point is always the family.

As the first circle of recognition, family represents a special sphere. In some ways, it stands in contrast to the spheres of society. One of its peculiarities is that its greatest asset is not enforceable. Respect in the form of love, care and security can be enforced neither legally nor ideologically. It can only be given and received.

In order to be capable of this, we need to create freedom within the family. We need to keep the family circle free of all forms of struggle for recognition, which will only come about in the second and third circles. Here, respect is gained only for meeting certain conditions – legal or performance-related. Thinking in terms of competitive performance or legality is just as inappropriate within the family as it is necessary outside of it. The family is therefore an elixir of life insofar as we make this freedom a reality within it.

04.12.11 17:46

Culture and cuisine blue 30/31

Culture and cuisine: December 2011 to April 2012

Inside Zurich Museum

Art

Perfume – Packaged Seduction Museum Bellerive Zurich, Höschgasse 3, 8001 Zurich Tel. +41 (0)43 446 44 69 2nd December 2011 to 9th April 2012 www.museum-bellerive.ch Perfume is more than just the scent of seduction. In this exhibition, visitors will admire not just perfume bottles but their corresponding ensemble consisting of packaging, advertising and perfume. Starting with the first glass containers of antiquity, it presents objects from famous designers as well as rarely seen creations right up to the present day, weaving fascinating stories around these containers and their capricious essences.

Haus Konstruktiv Zurich: Nelly Rudin Haus Konstruktiv, in the electricity sub-station “ewz Selnau”, Selnaustrasse 25, 8001 Zurich, Tel. +41 (0)44 217 70 80, 24th November to 31st January 2012, www.hauskonstruktiv.ch With the painted frames of her images and entirely freestanding acrylic glass prisms, the Swiss artist Nelly Rudin (born in 1928) has given essential impulses to the school of concrete art, truly earning her place among the leading representatives of the second generation of the Zurich Concretists.

Restaurant Restaurant CLOUDS Maagplatz 5, 8005 Zurich, Tel. +41 (0)44 404 30 00 Opening: 12th December 2011, www.clouds.ch The two star chefs Antonio Colaianni and David Martinez Salvany (each with 16 “Gault Millau” points) are now preparing Zurich’s “restaurant opening of the year,” operating together the rooftop restaurant CLOUDS in Zurich’s Prime Tower, opening on 12th December 2011. Aside from the attractive Mediterranean cuisine, the restaurant offers a fantastic panoramic view over the clouds of Zurich. The two well-versed culinary professionals are working hand in hand to give CLOUDS an innovative, authentic and above all personal touch.

Events NZZ Podium NZZ Foyer, Falkenstrasse 11, 8008 Zurich Tuesday, 28th February 2012, 6:30 p.m.

Tickets: Two weeks before the Podium Tel. +41 (0)44 258 17 80, www.nzzpodium.ch “Debt-Based Economy Without End”, with Prof. Thomas Jordan, Vice President of the Board of the Swiss National Bank. Partners: Bank Vontobel, Swiss Re.

Photo: PD

Fair

154738_Blue_IH_E.indd 30

GiardinaZÜRICH, Swiss Fair for Garden and Lifestyle Messe Zurich, Wallisellenstrasse 49, 8050 Zurich Oerlikon, Tel. +41 (0)58 206 50 00 14th to 18th March 2012, www.giardina.ch Discover the latest trends of the season at the Fair for Garden and Lifestyle. In addition to an abundance of flowers, plants and herbs, unique landscaping, a wide selection of garden furniture and practical garden accessories all await visitors, who will not only get good advice from recognised experts, but also insights into the studios of garden and landscape architects.

04.12.11 17:47

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CH-8022 Zurich

www.vontobel.com

Telephone +41 (0)58 283 71 11

Bank Vontobel AG, Mr. Mike Rose, Gotthardstr. 43, P.O. Box, CH-8022 Zurich, Switzerland

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Time

Forecasts

Thema blue 2/X

Vontobel Private Banking Das Magazin The magazinefür forPrivatkunden private clients Ausgabe Edition Frühling2011 2010 Summer

Passion

Thema

Thema

blue 3/X

blue 3/X

Vontobel Private Banking Das Magazin The magazinefür forPrivatkunden private clients Ausgabe Edition Autumn Frühling 2011 2010

Vontobel Private Banking Das Magazin The magazinefür forPrivatkunden private clients Ausgabe Winter Edition Frühling 2012 2010

Limits Ueli Steck: In the mountains there are clear limits James Nachtwey: Reality, up close Macro: Monetary policy and exchange rates: What is the fair value of a currency?

High-flyer Christoph Franz: Flying – a moment of leisure

Family

Peter Blaser: Experiencing the world by balloon

Hubertine Underberg-Ruder Underberg: thanks to tradition, ahead of its time

Macro: New reality in investment

Clown Dimitri Dimitri and his three families Macro The global economy: a review of 2011 and the outlook for 2012

Limits

High-flyer

Family

Further information on Vontobel Fund – Emerging Markets Bond Please contact me.

I am interested in a personal discussion with an advisor.

Family

First name

Hubertine Underberg-Ruder Underberg: thanks to tradition, ahead of its time

Last name Address

Clown Dimitri Dimitri and his three families

Postal code + City Tel.

Bank Vontobel AG Gotthardstrasse 43

E-mail

CH-8022 Zurich

Bank Vontobel AG, Renata Fäh, Gotthardstr. 43, P.O. Box, CH-8022 Zurich, Switzerland

www.vontobel.com

Telephone +41 (0)58 283 71 11

Macro The global economy: a review of 2011 and the outlook for 2012

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