The next generation with a new investment strategy
Through inheritance, responsibility for large fortunes is passing to the next generation – a generation with its own objectives.
Investment strategies are inevitably set to change, as wealth passes increasingly into the hands of a younger generation. The current Swiss inheritance study by Zürcher Kantonalbank estimates that a total of CHF 88 billion was inherited or given away in Switzerland last year. That is almost twice the amount distributed annually through AHV. Inherited assets have grown significantly in recent years; the volume has increased fivefold since 1990. In Switzerland, every second franc of wealth is inherited.
‘For the younger generation, it’s a given that entrepreneurs and investors, really everyone, should focus not only on maximising their own returns. They should also concentrate on making a difference by promoting a sustainable lifestyle,’ says Giuseppe Ugazio, professor at Geneva School of Economics and Management (GSEM), where the DAS Strategic and Operative Philanthropy is about to start.
“It’s ‘obvious’ to younger generations that both entrepreneurs and investors should care about more than maximizing their own returns.”
Giuseppe Ugazio, Professor at the Geneva School of Economics and Management
The fact that the course begins with a module on philanthropy and financial instruments reflects both the importance that it attaches to the subject of finance and the students’ expectations. The students are very interested in learning more about successful social entrepreneurs and innovative, sustainable investment strategies. ‘They are looking for examples of philanthropic initiatives that have managed to scale interventions and create market opportunities to replace seed funding,’ says Ugazio. In the recent past, the separation between philanthropy and financial investments has thus become more porous. ‘The search for attractive and effective ways of mobilising financial resources to support philanthropic objectives has been a very important trend in recent years, both in academic research and practitioners’ strategies,’ explains Ugazio. New financial tools such as impact investing not only aim to maximise returns – they want to make a social impact too.
Antonis Schwarz hat an der Harvard Kennedy School den Kurs zu nachhaltigem Investieren von Falko Paetzold besucht. Dieser ist heute Initiator und Managing Director des Center for Sustainable Finance and Private Wealth (CSP) an der Universität Zürich. «Das Thema nachhaltiges Investieren mit einer eigenen Abteilung zu fördern hat mich überzeugt», sagt Antonis Schwarz. Er hat Falko Paetzold deshalb als Co-Gründer des CSP unterstützt. Das Thema ist Antonis Schwarz wichtig. Er ist selbst Impact-Investor. Die Familie des Deutsch-Griechen hat in Deutschland das Pharmaunternehmen Schwarz Pharma gegründet und an die Börse gebracht. Als er 18 Jahre alt war, hat die Familie das Unternehmen verkauft. Auch er hat einen Teil des Vermögens geerbt. Zuerst hat er das Geld nicht angerührt, stattdessen hat er studiert und mit dem Master in Management abgeschlossen. Schliesslich hat er angefangen, sich philanthropisch zu engagieren. In Griechenland initiierte er 2013 die NGO Vouliwatch (Vouli heisst auf Griechisch Parlament). Das Internetprojekt will den Graben zwischen Politiker:innen und Bürger:innen schliessen und bietet bspw. die Möglichkeit, öffentlich Fragen an Abgeordnete zu stellen. 2016 hat Antonis Schwarz in Berlin die Guerrilla Foundation gegründet. Nachdem die Stiftung beim Start auch Flüchtlingsprojekte in Griechenland und Social Entrepreneurships unterstützt hatte, hat sie sich bald auf die Förderung von Graswurzelbewegungen und sozialen Bewegungen fokussiert. Auch mit seinem Vermögen will Antonis Schwarz Wirkung erzielen. Er hat ein Impact-Investment-Portfolio mit einem sehr langen Anlagehorizont. Dabei kommuniziert er auf der Website goodmove-initiatives.org transparent, wo er investiert ist und wo er sich philanthropisch engagiert. Daneben hatte er sein privates Geld zu Beginn in einem Fonds ohne strikte ESG-Kriterien angelegt. Damit er seine eigenen Vorstellungen diesbezüglich umsetzen kann, schichtete er den Grossteil seines Privatvermögens in ein ESG-Mandat bei einem Münchner Vermögensverwalter um. Für Antonis Schwarz war es entscheidend, dass er Titel verkaufen kann, wenn diese nicht seinen Werten entsprechen. Ursprünglich war er ein grosser Verfechter von Devestitionen: Bspw. hatte er alle Unternehmen, die mit fossilen Energien wirtschaften, aus seinem Portfolio entfernt.
Antonis Schwarz attended Falko Paetzold’s course on sustainable investing at Harvard Kennedy School. Today he is the initiator and managing director of the Center for Sustainable Finance and Private Wealth (CSP) at the University of Zurich. ‘I was interested in setting up a dedicated department to promote the subject of sustainable investing,’ he explains. As a result, he supported Paetzold as co-founder of the CSP. The subject is important to Schwarz, as he is an impact investor himself. His German-Greek family founded the pharmaceutical business Schwarz Pharma in Germany and floated it on the stock exchange. When he was 18, the family sold the business and he inherited part of the proceeds. He did not touch the money at first, choosing instead to study for a Master’s in Management. Gradually, however, he became involved in philanthropy. In 2013, he set up the NGO Vouliwatch in Greece (Vouli is the name of the Greek parliament). The internet project aims to address the gap between politicians and citizens by, for example, allowing the public to put open questions to members of parliament. In 2016, Schwarz founded the Guerrilla Foundation in Berlin. After initially supporting refugee projects in Greece and social entrepreneurship, it soon began to focus on promoting grassroots and social movements. Schwarz is keen to use his assets to make an impact too. He has an impact investment portfolio with a very long investment horizon and uses the website goodmove-initiatives.org to communicate transparently his investments and philanthropic involvement. He initially invested his personal money in a fund without strict ESG criteria. In order to realise his own ideas in this area, he moved most of his personal assets into an ESG mandate with a Munich-based asset manager. For Schwarz, the ability to sell shares that did not tie in with his values was crucial. He is a big advocate of divestment and removed all businesses involved in fossil fuels from his portfolio.
Financial reporting is not enough
Alongside his philanthropic work, Schwarz works as an impact investment consultant for the non-profit analysis and consulting firm PHINEO. In 2022, PHINEO investigated the activities and commitments of the new generation of family-owned enterprises in the German-speaking region. ‘NextGens respect the commitment of the previous generation, but want to set their own focus,’ the study claims. They attach more importance than the previous generation to making a positive social impact. This has changed the expectations of family offices too. The study found that the new generation expects more than financial reporting – it also demands non-financial reporting on the business’ social impact. The new generation is a catalyst for new approaches and new products. ‘Impact investing is very much driven by the younger generation,’ says Schwarz.
‘NextGens respect the commitment of previous generations, but want to set their own priorities.’
Antonis Schwarz, philanthropist and impact investor
However, he feels that the general level of knowledge on the subject could be improved and emphasises the importance of continuing education programmes. ‘The new generation wants to do things differently and they’re gradually coming into the money,’ he explains. He is also involved in another initiative, which investigates how dormant bank accounts in Germany could be used as a resource to benefit society. Currently, funds from inactive accounts in Germany go to the bank after 30 years. ‘We want to create a social investment fund (SIF) instead. If the genuine account holders cannot be traced, the funds should be used to benefit society via the SIF. And we want that to happen after 10 years,’ says Schwarz. In Switzerland, money from dormant accounts is transferred to the state after a period of 60 years.