Semi annual report 2025

This half-yearly letter is a special one, dear clients. I would like to focus in particular on the succession plan, which is important for you, our team and me. In this letter, I would like to tell you the story of our asset management company, which will be celebrating its 40th anniversary next year. I will then outline where we stand today, what our succession plan looks like and what our plans are for the future.

As you know, we have enjoyed an excellent organisation for many years with an extremely competent and experienced group of managers and a well-rehearsed team, ensuring that our day-to-day operations run independently of any single person – including myself. We have a high-calibre, four-member Board of Directors, a four-member Executive Board with decades of professional experience and a nine-member Investment Committee that meets at least once a month to determine our investment strategy and tactics. The DNA of “Hotz” is spread across many excellently qualified shoulders, so the “Pirmin Hotz key person risk” has long ceased to exist.

I will reach my statutory retirement age this autumn, and it is my good fortune to still be full of energy. So I hope, health permitting, to be able to stay on board for many more years. My company and our valued clients are and will remain my passion. Nevertheless, it is my duty and responsibility as founder and owner to plan my succession early and prudently in order to carry this successful company into the longer-term future and secure its independence.

The roots of Dr. Pirmin Hotz Vermögensverwaltungen AG go back to my student days. As a young investor, I realised that there was a huge gap between the glossy brochures of the banking world, the promises of many product salesmen, the oracles of market gurus and reality. Hype and reality often diverged significantly. I was struck to see that every bank proclaims to have the best analysts, the best stock market forecasts and the best investment products and, of course, the best returns for their clients. I was impressed by the confidence and conviction with which many representatives of the industry predicted stock market developments that only very rarely materialised. I never understood why bankers primarily sold their clients high-margin, complex and non-transparent products instead of investing in the low-cost originals – direct investments in equities and bonds. I came to the conclusion that this could be done better, more honestly and, above all, without the conflicts of interest that such products inevitably entail. Rather than focussing on product sales, the sole priority should be the interests of the client.

After obtaining my master’s degree in economics from the University of St. Gallen (HSG), I decided in the summer of 1985 to continue immediately with my doctoral studies. In my doctoral thesis, I focused on “modern portfolio theory” and the question of how securities portfolios can be optimally invested and globally diversified. I researched how efficiently and how quickly stock markets process new information, how reliable stock market forecasts by professionals are and whether there are strategies that can systematically – that is, not purely by chance – generate superior returns. Before committing professionally to the world of stock exchanges and financial markets, I wanted to find out what academic research had to say about the abilities and inabilities of investment professionals. This topic fascinated me because as a young investor I repeatedly attempted to succeed through stock picking, only to fall short due to overly high expectations. Unlike many bankers and asset managers who base their decisions purely on instinct, I believed it was essential that my future career as a wealth management expert – and especially my investment philosophy – be grounded in robust academic research, free of hocus-pocus. As a doctoral student, my goal was ultimately to learn everything of real value that academic research has to say about market forecasting and investment strategy – and that has remained my goal to this day.

When I started my doctoral thesis, I dreamed of the opportunity to join Goldman Sachs, Morgan Stanley or JPMorgan one day, to have a career in the “Big Apple”, New York City, the financial capital of the world, and aim for the top. The trouble with just focusing on my thesis was this: Simply writing a dissertation – on what was in part a dry topic – seemed a bit academic to me. I was too “hungry” for that. So in 1986, as a 25-year-old HSG doctoral student, I founded Investment Consulting St. Gallen together with my Austrian flatmate Rainer Konrad. The partnership was run from our student flat on the fourth floor at Rorschacherstrasse 126. We each owned a 50% share in the company.

Rainer Konrad and I complemented each other perfectly. While Rainer knew how to use a computer, I was still stuck with the good old typewriter. On the other hand, he hardly understood anything about capital markets and asset management. So I contributed my expertise in the field of capital investment to our partnership. Together, we developed the “General Exchange Price” seminar, which we offered to interested investors in Eastern Switzerland and publicised via articles and advertisements in the St. Galler Tagblatt and Die Ostschweiz. During the day, we worked on our entrepreneurial projects, while we often worked on our doctoral theses late into the night. In autumn 1986, we rented a seminar room at the Hotel Einstein, the leading hotel in St. Gallen, for four evenings for our first event. The aim of our seminar was to demonstrate in a practical and accessible way how investing with equities, bonds, property, foreign currencies and modern financial instruments works. With a lot of passion and commitment – we had to follow up with numerous interested parties by phone to convince them to take part – we managed to get the seminar fully booked. The success spurred us to organise a second event in spring 1987.

Our speaking engagements at the Hotel Einstein in St. Gallen also provided us with the ideal platform to take our first steps as asset managers. Three course participants were so impressed by our presentation that they immediately transferred some of their assets to us to manage. The signing of the first asset management contracts, which we successfully secured, was an exhilarating moment we would never forget. The step into independent entrepreneurship had been taken!

The success of our seminars for private investors motivated us to offer adapted versions to interested banks and financial institutions. We developed seminars in the areas of “Modern Portfolio Management in Practice” and “The Practical Use of Modern Financial Instruments”. The seminars on these topics proved to be perfectly timed over the next few years. In 1988, the SOFFEX exchange (Swiss Options and Financial Futures Exchange) opened in Switzerland and two years later the DTB (German Futures Exchange) opened in Germany. These were ideal opportunities for our derivatives seminar on options and futures. In 1990, the awarding of the Nobel Prize to the economists Harry Markowitz and William Sharpe for their work in the field of Modern Portfolio Theory gave us fresh momentum for our “Modern Portfolio Management in Practice” seminar.

During this time, I had an encounter that shaped my decision to become self-employed after graduating. As in every year, the Forum was held at the University of St. Gallen, a platform that gives graduating students the opportunity to connect with companies such as Nestlé, Roche or UBS (at that time SBG and SBV). During this economic boom, we were heavily courted by the top companies. The plan was to go to the “Forum” with my colleague Rainer Konrad to “turn the tables”, so to speak. As new young entrepreneurs, we were not interested in the lucrative jobs that the HR and finance managers there were offering us. Rather, we wanted to promote our seminar services to them. But as luck would have it, my colleague Konrad came down with the flu that very day, so I had to undertake this adventure on my own.

I went to the HSG, looked at the various bank stands, plucked up all my courage and approached a bank that wasn’t too big – in my opinion, large banks had enough specialists of their own to train their managers. After some hesitation, I aimed for the private bank Vontobel. There stood Dr Urs Ernst, a young analyst and later member of the bank’s Executive Board. My greeting was as follows: “Hello Dr Ernst, my name is Pirmin Hotz. I know that the purpose of the forum is actually a different one, but I would like to put a proposal to you. I am a doctoral student at the HSG. Together with a fellow student, I’ve founded a company called Investment Consulting St. Gallen. We’ve developed seminars that cover all key stock market topics – from equities and bonds to hedging strategies using options and futures. We would be happy to train your managers so that they are equipped to deal with growing client needs.” Urs Ernst’s response was immediate: “Thank you very much, Mr Hotz, for your offer, but Vontobel has the size and expertise to train our employees with our own specialists. We therefore see no need for your training.” His response was disappointing, but not discouraging.

The Julius Baer stand was located diagonally across from Vontobel. Before I approached the two gentlemen there, I took a 10-minute walk around the “Forum” so as not to come across as a door-to-door salesman. Then I plucked up my courage again, went over and told the same story I had told to Vontobel. A nice middle-aged gentleman (he must have been around 50 years old) immediately took an interest in my request. He was Helmut Saurer, a member of the Executive Board and responsible for the bank’s entire institutional business. He was a graduate of the HSG himself, which was an advantage for me in setting the tone. Fortunately, I had brought a copy of one of our seminars with me in a ring binder, because Helmut Saurer asked me if he could take it with him. He would submit it to one of his directors for review. I would then hear from them again.

A few days later, Director Paul Lang, the friendly head of training at Bank Julius Baer, called me and referred to my meeting with his boss Helmut Saurer. He invited me to a meeting followed by lunch in Zurich, at which his fellow directors Liensberger and Merz, who were responsible for the private and institutional client business, would also be present. Wow, an invitation from three directors of arguably the most renowned private bank in Switzerland – what an opportunity! Luckily, I found some slightly dusty clothes, a shirt and a tie, in my student flat. So a few days later I made my way from St. Gallen to Zurich. There I was welcomed by the three directors and I was able to present my seminar idea at a lunch on the bank’s executive floor. Messrs Liensberger and Merz signalled a certain scepticism as to whether a young upstart like me, who had no practical experience, would be able to assert himself with the bank’s long-serving and critical client advisers. Some of them were old foxes and there was a danger that they would “tear me apart”. I tried to dispel the doubts, which I largely succeeded in doing. Then Paul Lang said: “So Mr Hotz, this is how we’ll do it: We’ll give you the opportunity to simply hold a trial seminar day for around 20 of our employees. If you’re good and we get positive feedback, then we’ll talk about a larger assignment.” Of course, I was more than happy with that. I accepted the challenge.

At the end of the wonderful lunch in the dress circle (the banks have always been masters at staging such meals), Paul Lang asked me this: “How much will this one seminar day cost us, Mr Hotz?” Phew. Of course I had expected this question, but I had shied away from it like the devil shies away from holy water. I knew that if I sold myself too cheaply, I would be a low-cost provider for the rest of my life because my price tag was fixed. If, by contrast, I sold myself too expensively, I would run the risk of being shown the door at the prestigious private bank on Zurich’s Bahnhofstrasse as a presumptuous student. I took a deep breath, paused, and emphasised that the day rate I was about to quote would include everything: my daily fee, preparation time, travel time and expenses, the cost of producing seminar materials, and all other associated costs. I then named the daily fee, “4,000 francs!”, and tensely awaited the reaction of the three directors. Of course, I really wanted the honourable contract, so I would have accepted it even for a lower fee. I’ll never forget how cool Paul Lang was in reacting to my offer: “OK, Mr Hotz, that’s fine with us. Let’s do it.” I was relieved and drove back to St. Gallen feeling good.

A few weeks later, I travelled back to Zurich and held my seminar day. I gave it my all and handled the critical questions from the participants with aplomb. After this trial day, Paul Lang immediately called me at my student flat - or “company headquarters”, as I liked to call it - in St. Gallen and told me that he had received extremely positive feedback. The participants received me very well as a speaker, which is why they decided to engage me for an entire series of seminars. I was contracted by Julius Baer to train all of the bank’s client relationship managers in the area of derivatives and was also personally introduced to the bank’s legendary CEO, Hans J. Baer (the father of the future CEO Raymond J. Baer). If I remember correctly, this first major engagement included 15 seminar days (5 events of 3 days each). Naturally, I was expecting Paul Lang to negotiate a flat fee with me that would be significantly lower than the agreed 4,000 francs per day. To my surprise, he said at the end of our telephone conversation: “But, Mr Hotz, you are in agreement that we should leave the daily rate for the entire seminar series at 4,000 francs, right?” I certainly agreed! 60,000 francs for – net – 15 days of work, what an income for a student! I was in seventh heaven. For my doctoral student colleagues, who toiled away as assistants to their professors for 2,000 francs a month and (at least) a 50% workload, a world collapsed. They could hardly believe it. From then on, when I negotiated my daily fee with other banks, it was almost a done deal. I referred to Julius Baer, which was enthusiastic about my seminars and paid me a daily rate of CHF 4,000 – from that point on, it became the benchmark. I subsequently worked as a consultant for Julius Baer for around two decades and trained their teams.

In addition to the private bank Julius Bär, in 1987 and 1988 we succeeded in acquiring the St. Galler Kantonalbank, the Thurgauer Kantonalbank, the regional bank CA St. Gallen (now Acrevis), the Association of Swiss Regional Banks and the financial data service provider Telekurs (now SIX) as consulting clients.

This pioneering phase also included the “pyjama story”, which I described in my book “About Greed, Fear and the Herd Instinct of Investors”. I will never forget how I opened the door of our “company headquarters”, or our student flat, on a spring morning in 1987 to our first asset management client – his name was Schneider – while wearing my pyjamas. I was firmly convinced that it was “only” the postman who wanted to deliver a registered letter to one of us four flat-sharing students. All the more embarrassing, then, to find myself face to face with Mr Schneider, who had spontaneously come by for a client meeting. It was also at this time that I met a director of Merrill Lynch, also described in the book, who persuaded me to encourage my father to place money under the management of the banker – only to see it all lost in a few months. It was a bitter but incredibly valuable experience – one that still shapes my view of so-called gurus to this day. In our early start-up phase, we were also put to the test by the historic stock market crash on 19 October 1987 – the infamous “Black Monday” – which sent shockwaves around the globe and caused the market to drop by more than 20 per cent. Those wonderful pioneering entrepreneurial days in St. Gallen remain an unforgettable memory for me. They laid the foundation for our company’s success today, which is why we date our company anniversaries back to the founding of Investment Consulting St. Gallen in 1986.

I completed my dissertation at the University of St. Gallen in 1988. Because of a level of success I had never thought possible, I decided to bury my dream of a career in New York and head down the entrepreneurial road right out of university. Subsequently, I parted ways with my Austrian business partner. Together with Daniel Lanz, a former member of the management board of Zürcher Kantonalbank, I founded Theta Finanzberatung & Portfolio AG in 1989 at its current headquarters in Baar. I transferred the bank consulting and asset management mandates I had built up in St. Gallen to the new company. For his part, Lanz also brought a number of private clients into our asset management business. He also had contacts at banks that were interested in our consulting and seminar services. Again, we each owned a 50% stake in the company.

We quickly succeeded in acquiring other renowned banks and financial institutions in Switzerland, Germany and Austria as clients. They included, for example, Schweizerischer Bankverein (now UBS), Schweizerische Kreditanstalt (now UBS), Privatbank Sarasin, Zuger Kantonalbank, the German private bank Trinkaus & Burkhardt (now HSBC), Dresdner Bank (now Commerzbank), Bayerische Hypotheken- und Wechsel-Bank (now UniCredit), Bankgesellschaft Berlin, Westdeutsche Landesbank, Landesbank Schleswig-Holstein and the consulting firms Ernst & Young (EY) and Schweizerische Treuhandgesellschaft (STG). We also offered our seminars via the Centre for Corporate Management (ZfU) and the SOFFEX derivatives exchange. In Germany, we partnered with the Vereinigung für Bankberufsbildung (VBB) in Frankfurt am Main and with the renowned Börsen-Zeitung, through which we offered our three-day seminars. In the late 1980s and early 1990s, our activities focused on advising banks, banking associations, stock exchange institutions and international consulting companies. As a consultant and seminar speaker, I was on the road around 140 days a year during this phase – hotels and airports became my constant companions.

Parallel to our intensive lecturing activities, we gradually expanded our asset management business and in 1989 won our first mandate from a pension fund – the fund of a locally based, publicly listed and internationally operating paper company. In the same year, we hired our first secretary and our first portfolio manager. When acquiring our asset management mandates, we naturally had neither references nor a track record to present ourselves in a favourable light in terms of marketing. Our best argument was that we trained experienced bankers and client advisers from Julius Baer or Schweizerischer Bankverein (now UBS). Our numerous consulting mandates from renowned banks in Switzerland and Germany were our best and only reference for winning clients for our asset management. That worked wonderfully.

In 1992, at the age of almost 32, I received an honourable offer from Düsseldorf. It came from Germany’s largest and most renowned private bank at the time, Trinkaus & Burkhardt. After I had the honour of conducting several seminars for the bank, Herbert Jacobi, the spokesman for the personally liable partners, asked me whether I would like to take over the position of CEO of the subsidiary Trinkaus Capital Management, where the entire institutional business was based. As tempting as the job and the almost unbelievable salary were: After having had a taste of self-employment for a few years, I declined the offer with a heavy heart, but great conviction. But the smart banker Jacobi remained persistent and offered me an exciting exclusive cooperation as an alternative, which guaranteed my economic independence. The partnership was aimed at supporting the bank in acquiring and advising institutional clients, expanding its business and raising its quality to a new level. I was also offered a seat on the Supervisory Board of Trinkaus Capital Management in Düsseldorf and on the Board of Directors of the Swiss subsidiary bank in Zurich.

The lucrative exclusive partnership with the private bank, which was geared towards acquisition success, was a great opportunity for me that I wanted to seize. From the beginning of 1993, I spent 100 to 130 working days a year on this extraordinary project. Accordingly, I reduced my consulting and seminar activities. For six years, I got to know interesting investors throughout Germany, advising and acquiring them on behalf of the bank – without being employed by it. I remained completely independent and met the bank’s potential clients and investors with a business card stating “Member of the Supervisory Board”. This type of partnership, which was very entrepreneurial on both sides, would hardly be conceivable today - if only for regulatory reasons.

The exclusive partnership with the elite private bank in Düsseldorf’s “Königsallee” lasted from 1993 to 1998. For me, this period involved intensive travelling throughout Germany – usually four flights a week, concentrated on the weekdays from Sunday to Wednesday. I felt like an itinerant preacher travelling all over Germany to explain to institutional investors (including listed international corporations, insurance companies, pension funds, savings banks, doctors’ funds, church institutions and professional associations) what they should do with their assets. At the same time, I expanded my base of asset management clients in Switzerland and continued to advise several banks, most notably Julius Baer and Sarasin – primarily from Thursday to Saturday (smaller banks were happy when I came in on Saturday, as they could bring all their employees together without taking them away from their day-to-day work).

My partnership with Trinkaus & Burkhardt in Düsseldorf was very successful. We increased assets under management fivefold within just a few years. Since I had signed a performance-based contract, this turned out to be an absolute stroke of luck for me – not only financially, but also in the form of valuable experience in dealing with prospective investors.

In 1998 – it was the sixth and final year of the partnership envisaged by both parties – I received the honourable offer to become a personally liable partner of Trinkaus & Burkhardt from Dr Sieghart Rometsch, then spokesman for the personally liable partners of the bank. At that time, this was probably the most sought-after and best-paid banker job that Germany had to offer. If I had accepted, it would have catapulted me into the headlines of the media, because at the age of 38 I would have become by far the youngest member of the personally liable partners of Germany’s most renowned private bank. As lucrative as this offer was, I turned it down with the utmost conviction. I would have had to give up my entrepreneurial independence, which had long since become non-negotiable, and move to Düsseldorf with my family. Despite all the fame and honour, that was out of the question for me – perhaps even precisely for that reason. I preferred to remain a small king rather than become a great servant. I will never forget the years in Düsseldorf, because they brought me together with countless senior figures from the German corporate world at a young age, with whom I was able to talk as an equal.

My decision towards the end of 1992 to enter into an exclusive cooperation with the Düsseldorf bank was linked to the separation from my business partner Daniel Lanz, with whom I had been associated for three years, as I had been with Rainer Konrad. Subsequently, in 1993, I founded Dr. Pirmin Hotz Vermögensverwaltungen AG, to which I transferred all of the asset management mandates. The company’s headquarters remained at Dorfstrasse 16 in Baar, as it still is today – in the building that my father built in the 1970s. Since then, I have owned all the shares in “Hotz”. After my experience with 50/50 ownership, I decided at the beginning of 1993 not to sell any more shares in my company in order to ensure a clear ownership structure. Instead, I brought entrepreneurial partners on board and gave them a significant stake in the success of the business without them becoming co-owners of the company. This model has proven to be successful for decades. I am convinced that a clear ownership structure is the best way to ensure the long-term independence and investment philosophy of a family business.

After ending my cooperation with Trinkaus & Burkhardt, I devoted myself to expanding my asset management activities – with a focus on Swiss and German clients – alongside selected bank consulting mandates. One pleasant consequence of this was that my business trips were reduced, so that I had more time for my family. In 1994, I married my wife Barbara, who took on a leading role in the upbringing of our three children and also gave me the support I needed to build my company. I am deeply indebted to her for this. Time with the family was and is of fundamental importance to me.

The first partner I took into my current company at the beginning of 1993 was Raimund Zemp. A former client advisor at Schweizerische Bankgesellschaft (now UBS), he supported me in all aspects of the day-to-day business. While I spent most of my time travelling in Düsseldorf, Frankfurt, Hamburg, Munich, Berlin, Dresden and Stuttgart, he looked after “my” clients, guided the staff and, together with an assistant, managed the client portfolios.

In 1997, Adrian Bachmann joined my company as the second partner. Adi, a passionate client advisor, is still part of my team today, still highly committed, and the longest-serving of my partners. It’s hard to imagine my team without Adi. He is still in excellent form and has promised to remain on board for years to come. I am always impressed by how Adi maintains and expands his network of relationships, even at an advanced age. He is a gifted business developer with the right instinct for clients’ concerns.

If there was a difficult phase in my entrepreneurial career, it was the year 2006. Business was in full swing – we surpassed the billion mark in assets under management for the first time and were already one of the largest independent asset managers in Switzerland at the time. After 13 years with the company, my partner Raimund Zemp decided to head in a new direction and leave the company. The decision came as a surprise and was a personal disappointment for me. He left a gap that could not easily be filled in the short term. During this challenging time, my working days often lasted well into the night. After Raimi left at the end of 2006, our team consisted of me and my modest contribution, my partner Adrian Bachmann, Reto Kalkhofer and Sandra Stocklin. To this very day, I remain grateful to the three of them, who are still important pillars of our team, for their active support during this challenging phase.

It turned out to be a real stroke of luck that in 2007 I happened to meet Thomas Hauser, a PhD economist who was a consultant at PPCmetrics, Switzerland’s leading pension fund advisor. I managed to bring Thomas on board as a new partner. This decision has turned out to be a great “win-win” for both of us throughout all the years we have worked together. With his expertise in the institutional business in particular, Thomas has contributed a great deal to making our company what it is today. He looks after an extensive base of Swiss and German clients and has systematised the processes and workflows in our growing and increasingly digitalised company. Like Adi, Thomas is and will continue to be an important part of our team and I am delighted to be able to continue to count on his valuable support.

Guido Hoyer, an exceptionally talented client advisor, joined our company as a partner in 2012. With his engaging and pragmatic manner and his first-class network of contacts, he has already brought us many outstanding client relationships. Client service is his passion. I am sure that he will remain part of our team for many years to come, just like his partner colleagues Adi and Thomas. The youngest partner in our group is Renato Brand, who has been with us since 2022. Renato has been leading our portfolio management team with great care and the utmost professionalism for a decade. His role as the “engine room” boss is very important, as he and his team guarantee that our successful investment philosophy is implemented consistently and as flawlessly as possible. Finally, Serge Koch, a young and exceptionally talented client advisor, has joined the Executive Board, ensuring that our leadership team is broadly supported.

Even though it is difficult for me, I will refrain from listing and describing all 26 team members by name. I am very proud of this extremely qualified, client-focused and down-to-earth team and it still gives me great pleasure every day to work with all these fantastic people. Nevertheless, from an entrepreneurial point of view, it is important to recognise the finite nature of one’s own existence and to plan one’s succession early and prudently. Anything else would be irresponsible - irresponsible towards the team, but especially irresponsible towards you, dear clients.

As I explained in a previous client letter, I am the father of three wonderful grown-up children. Désirée, my youngest, completed her Master’s degree in History at King’s College London in autumn 2022. She is currently writing her doctoral thesis at the same university. Désirée signalled early on that her passion and strengths lie in historical and political topics. At least from today’s perspective, the budding historian sees her path outside our family business. My older daughter Victoria obtained her Master’s degree in law from the University of St. Gallen in spring 2023. She then completed her year as a trainee at the American law firm Baker McKenzie in Zurich. This was followed by an internship at the Cantonal Court of Zug, which is a prerequisite for admission to the bar. It remains to be seen whether and in what form Victoria will one day play a role in the succession plan of the family-owned asset management company. There is no doubt in my mind that she is capable of doing this.

Florian, my eldest “child”, graduated from the University of St. Gallen with a Bachelor’s degree in both Business Administration and Law and then had the opportunity to complete his Master’s degree at the University of Oxford. Florian’s time in Oxford was an unforgettable experience that gave him a wealth of expertise, valuable experience and countless friends from all over the world. His strong affinity for the structure and workings of the stock and capital markets was already apparent when he was a teenager. Whenever we see each other, we discuss current events in the financial markets. The father’s financial virus has undoubtedly been passed on to his son. After graduating from Oxford, Florian worked in the investment banking department of the major American bank Citigroup in London before joining the investment team at Kite Lake Capital, a specialist asset manager in London. Although Florian has long internalised and shared my investment strategy and views on the predictability of financial markets, he felt the need to gain his own professional experience and achieve his own goals before joining the family business.

Planning and successfully implementing the succession of a family business is probably the greatest challenge an entrepreneur has to master. There are fundamental questions that need to be asked and answered. First: Are one or more of my children capable of leading the mature company and its clients and team into a successful future? Second: Are one or more of my children also willing to succeed me? There are two memories that have especially shaped me in the context of succession and in answering these two questions. I would like to share them with you.

As a student, I listened to a presentation given by a successful and charismatic Swiss entrepreneur in the auditorium of the University of St. Gallen. I was just starting out as a young entrepreneur and hung on the speaker’s every word as he told his company story in an entertaining way. After the presentation, we were allowed to ask questions. The last question from a student has remained with me since then: “Will your son take over the management of your company one day?” We all recognised the sensitivity of this question, as the speaker’s son was also sitting in the room listening. The patriarchal-looking entrepreneur did not hesitate and said in a firm voice: “The bar is very high for my successor. He must be able to prevail over internal and external candidates and be particularly qualified. My son would not be able to meet these requirements, which is why he is out of the question as a successor.”

The harsh statement from the entrepreneur and family man was hard to swallow, and probably not just for me, but also for many other students. Even though I still can’t understand how insensitively the entrepreneur discredited and “dismissed” his own son in front of us students, his statement has had an enormous influence on my own succession planning to this day. Since then, I have known all too well: “If you want to and intend to pass on your own company one day, you can only pass it on to capable successors.” I have to be honest and as objective as possible when assessing the abilities of my own children. If I hand over my company to a child who is not up to the task, I am not doing anyone a favour: Not our clients, not the experienced team, not myself and certainly not my own child or children. They will be unhappy if succession planning goes wrong, and the dream of succession turns into a nightmare. In the worst case scenario, the interpersonal relationship between father and child could even break down – a horrendous scenario that has unfortunately often become a reality in the business world. This must be prevented at all costs.

The second occasion that left a lasting impression on me came about 10 years ago when I read an interview with a German entrepreneur who had handed over his life’s work to his daughter. When asked what was the most important thing for him in the succession process of his family business, he replied: “The children have to impose themselves.” It’s no use, the entrepreneur continued, if a child is capable but doesn’t have the inner fire to take over. Anyone who asks or even urges their child to succeed them would be doing neither the child nor the company a favour, he added. This statement made sense to me and impressed me. I vowed not to signal any explicit expectations to my children. They should seek and find fulfilment in their lives, independently of our family business. They should do what they enjoy doing. They should do their work with joy and a great deal of passion – regardless of the profession in which they work. I internalised this message fully when I read the interview with the German entrepreneur.

And so one late autumn evening in 2019, I found myself sitting down for supper with Florian. As on many other occasions, we discussed the economy, politics, financial markets and the challenges I was currently facing in my asset management company. He knows our business almost inside out. In many stimulating conversations, we have continually inspired each other and, when necessary, also “duelled” vigorously – always characterised by mutual respect. During the course of the evening, Florian told me that he wished to put himself forward – or, in the words of the German entrepreneur, “impose” himself – as my successor.

It was a historic and emotional moment for me, as I had, of course, secretly hoped that this day would eventually come. Now it had become reality, and a dream had come true. Since I could never have imagined selling my “fourth child” to a bank or other institution and placing it in someone else’s hands, I felt – and still feel – incredibly fortunate that Florian signalled his intention to follow in my footsteps. I have not the slightest doubt that he is capable of doing so. With a second-generation family member joining the business, the independence of our wonderful company is secured. It will remain in family hands for the long term. This ensures the continuity of our experienced and capable team and the consistent implementation of our proven and successful investment philosophy.

Florian will join our family business as a member of the Executive Board at the beginning of September. He will use the period following his entry to familiarise himself thoroughly with day-to-day operations, gain experience, and meet with clients. All members of the Executive Board will remain in place to ensure continuity. In agreement with Thomas Hauser and the entire team, Florian is expected to take over operational management as CEO in approximately two years – we will be happy to inform you as soon as the exact date has been set. Thomas will continue to be a key pillar of our leadership team and will maintain responsibility for a broad client base. For my part, as Chairman of the Board of Directors, I will actively support Florian and the Executive Board. Personally, I am truly looking forward to setting this generational transition in motion.

What are my personal prospects in the coming years? As the owner and Chairman of the Board of Directors, the succession process remains a top priority for me. It goes without saying that I will continue to contribute my ideas and convictions on all important issues facing our company in strategic and operational terms as well as investment policy. I will stay closely involved with the business and will make myself available, where helpful, for selected meetings with our valued clients. I still find great joy in engaging conversations and lunches with interesting people. With heartfelt dedication, I will continue to support selected client acquisition efforts. I will also keep reading extensively and staying informed about developments in the stock markets and global affairs on a daily basis.

I will also continue to write with great passion for selected specialist publications – especially as I am honoured to be the only representative of the banking and asset management industry regularly invited to contribute lead articles to the renowned “Finanz und Wirtschaft” (“Finance and Economics”). Last but not least, I author the comprehensive biannual reports for our valued clients. I still enjoy all of these activities immensely, even if my passion for writing is admittedly time-consuming. Health permitting, you can assume that I will remain at the “helm” of our family business and part of our outstanding crew for many more years to come. As we grow, we will continue to expand this team with top-tier professionals. “Hotz” will remain an important part of my life. However, I will take care to avoid a “rookie mistake”: introducing the next generation but being unable to let go myself.

Upon reaching retirement age, I also set myself an ambitious goal – one whose success depends primarily on my own discipline: to become less tied to my calendar. It is still scheduled out months in advance and prevents me from spontaneously escaping to the mountains to enjoy the ski slopes in Zermatt or setting off on a trip when the weather looks promising. So my aim is not primarily to work less, but to become more flexible in how I organise my time and appointments.

If I feel like taking part in a client meeting or lunch at short notice and have time, I’m more than happy to do so – if not, maybe I’ll be able to do it the next time. In other words: With regard to my agenda, I would like to sit in the “driver’s seat” from now on. I have no doubt that our long-standing clients will also understand my (life) plan to bring more flexibility and freedom into my agenda.

In all modesty, we can be proud that we are now recognised as the leading independent asset manager in Switzerland. We have a very broad and exceptionally high-quality client base, with around three-fifths of our assets under management coming from private investors and two-fifths from institutional investors. Geographically, around 75 per cent of our clients are based in Switzerland. Just under 25 per cent of our clients come from Germany, with the majority in the regions of North Rhine-Westphalia (Düsseldorf, Cologne), Bavaria (Munich, Nuremberg), Baden-Württemberg (Pforzheim region) and Hamburg. A few of our clients come from countries such as Austria and Sweden.

We want to remain a strong boutique with a clearly defined profile in the years to come. We do not allow ourselves to be dazzled and seduced by high-margin fad products. Of course, the aim of the upcoming generation will be to strive for further organic growth. A company that does not grow becomes sluggish and complacent and will ultimately fail. Switzerland will remain our main target market. We also see great potential for the long-term future in Germany. In due course, we will consider applying for a licence from the German supervisory authority BaFin in order to be able to actively develop this attractive market. We will constantly strive not to compromise on quality when it comes to looking after our valued clients.

True to the motto “stick to what you know best”, we will continue to focus on what we are good at and where we are convinced that we can not only play in the Champions League, but also win it.

The DNA of our investment philosophy will continue to be characterised by the conviction that equities are the most superior of all asset classes over the long term. There is no way around this academic evidence. This is shown in the “UBS Global Investment Returns Yearbook”, which is published annually by three renowned academics from the London Business School, Elroy Dimson, Paul Marsh and Mike Staunton. USD 1 invested in a world equity portfolio of developed countries in 1900 resulted in an amount of USD 23,608 (8.4 per cent p.a.) at the end of 2024.

In contrast, bonds – while serving a valid purpose as a stabilising element in investment portfolios – stand no chance. An initial investment of USD 1 in bonds from developed countries would have resulted in capital of just USD 216 (4.4 per cent p.a.). Although the annual return on bonds is half that of equities, the final capital is just 1 per cent of what equities would have delivered – a monumental difference owed to the famous “miracle” of compound interest.

The importance of reinvesting dividends in equity portfolios is demonstrated by a long-term analysis of US equities. Anyone who invested in US securities in 1900 and reinvested the dividends annually would have achieved an annual real return (after deducting inflation) of 6.6 per cent by the end of 2024. However, anyone who took the dividends out of their account each year and consumed them had to be content with a comparatively modest annual real return of 2.5 per cent over the same period. The compounding effect of reinvesting dividends annually should not be underestimated.

The attractiveness of equities is also confirmed by a long-term comparison conducted by the Geneva-based private bank Pictet for Swiss equities. Since 1926, the annual return on Swiss equities has been 7.7 per cent (5.6 per cent in real terms). In comparison, the return on Swiss bonds in the same period was 4.0 per cent (2.1 per cent in real terms).

An important component of our investment philosophy is also the realisation that it is not worth investing directly in developing countries in the long term. This too is impressively demonstrated by the analysis of the three British professors. While an investment of USD 1 in developed countries in 1900 yielded an annual return of 8.4 per cent (5.3 per cent in real terms) or final capital of USD 23,608, an initial investment of USD 1 in emerging market equities – after 125 years and an annual return of 6.7 per cent (3.7 per cent in real terms) – “only” resulted in a final capital of USD 3,462. It is therefore clear that the higher risks of emerging markets will not be compensated by higher returns in the long term. That is why we generally avoid investing in equities in developing countries. With our Western market leaders, many of which have strong exposure to emerging markets, we cover this segment optimally and with lower risk. The comparison for bonds is no better. While investments in developed market bonds returned 4.4 per cent annually (1.4 per cent in real terms) and resulted in capital of USD 216, investors in emerging market bonds had to make do with just 2.7 per cent annually (–0.3 per cent in real terms) and final capital of USD 27. For this reason, we also confidently exclude emerging market bonds and high-yield bonds in general. Our advice to clients, unchanged for decades, remains: “It’s better to hold a slightly higher proportion of equities than to include risky bonds of questionable quality in your portfolio.”

We consider property investments to be the second-strongest asset class after equities. Their long-term returns are likely to be close to or slightly above those of bonds, but will never match equities. Our experience also shows that private investors in Switzerland and Germany often already hold substantial “concrete gold” as direct investments (houses, condominiums, holiday properties), which is why in the vast majority of cases we do not add a separate property component to our securities portfolios. The outlook for gold is gloomier, despite its impressive recent performance. Over the very long term, gold has delivered returns only slightly above inflation, and that with high volatility risk.

Of course, the short-term risks and fluctuations in returns on equities are significant. Every now and then, there are major disruptions. We remember the years 2000 to 2003 (bursting of the dotcom bubble, 9/11 and Swissair grounding), 2007 to 2009 (financial crisis) and 2020 (coronavirus crisis), when shareholders suffered double-digit losses. Such losses are always painful for investors, even if they are unavoidable due to their unpredictability. However, from a long-term perspective, which is essential for shareholders, these short-term risks are basically irrelevant. Since 1926, there has not been a single 15-year period on the Swiss stock market in which the average annual return was negative. 21 times the average return over 15 years was between 0 and 5 per cent annually, 34 times between 5 and 10 per cent, 26 times between 10 and 15 per cent and 3 times between 15 and 20 per cent. That speaks for itself. Despite this, private households in Switzerland invest just 13 per cent of their financial assets in equities, according to the Organisation for Economic Co-operation and Development (OECD). This share is even lower in Germany at 12 per cent. While the French invest 24 per cent of their financial assets in equities, the Scandinavians and Americans hold much higher levels - around 40 per cent. According to the wealth statistics of the Swiss National Bank (SNB), private households in Switzerland own equities worth around CHF 400 billion. By comparison, they hold more than twice as much in cash and bank deposits at CHF 900 billion – a systematic loss-making position in real terms after adjusting for inflation.

The dream of exiting equity positions at the perfect moment and buying back in after a strong correction is an illusion. And it is dangerous, as the following considerations show. Guess the ten best trading days for the Swiss stock market (SMI) over the last 30 years. Intuitively, one would assume that the majority of them took place during economic upswings or bull markets. Not so! The best days on the stock market all occurred when markets were in turmoil.

1. +11.4 per cent on 13 October 2008 (financial crisis)
2. +7.8 per cent on 6 October 1998 (Russia crisis)
3. +7.0 per cent on 24 March 2020 (corona crisis)
4. +6.7 per cent on 24 September 2001 (dotcom 9/11 crisis)
5. +6.7 per cent on 17 October 2008 (financial crisis)
6. +6.5 per cent on 25 July 2002 (dotcom and 9/11 crisis)
7. +6.3 per cent on 24 November 2008 (financial crisis)
8. +6.2 per cent on 29 October 2008 (financial crisis)
9. +6.1 per cent on 19 September 2008 (financial crisis)
10. +5.9 per cent on 12 October 1998 (Russia crisis)

All the best days on the stock market over the last 30 years have occurred during major stock market crises, most frequently during the financial crisis, when stock markets halved on average and international banking institutions such as UBS fell like dominoes. Losing your nerve in times of crisis and exiting equities at the worst possible moment means risking missing out on the very best days. That is why long-term thinking will continue to be an elementary part of our investment philosophy in the future.

High-quality equities in companies with a promising business model that are among the international market leaders in their sector form the core of our investments. Depending on the individual client profile, they are complemented by high-quality bonds. For institutional investors, property investments, which we implement via investment trusts, funds, or listed property companies, are also frequently considered.

With regard to current events on international capital markets, I would like to be brief for once. The latest stock market earthquake triggered by the combatative US President Trump at the beginning of April with the announcement of his bizarre tariff policy shocked the world. In our year-end letter six months ago, we noted: “This is probably certain: only Wall Street and financial markets will be able to curb the megalomania of the would-be dictator.” This is exactly what has now happened. Following the announcement of absurdly high tariffs, US interest rates spiked so sharply that Trump had to pause his plans in order to prevent a total crash in global financial markets. Memories of the former British head of government Liz Truss came flooding back – as her tax cut plans in 2022 caused the prices of British government bonds to plummet, and the Bank of England had to intervene and Truss had to resign. The global loss of confidence in American politics and the dollar has since driven the price of gold sharply upward.

It is my pleasure to assure you emphatically that nothing will change in terms of the support you receive from our competent team when Florian joins our family business. Our proven investment philosophy will also remain unchanged. The Executive Board, which has been in place for many years and will soon be expanded to include Florian, will continue to implement the clear and straightforward strategy of “Hotz” and carry it forward into the future with uncompromising independence and consistency. If you would like to contact Florian Hotz, you can do so at his e-mail address This email address is being protected from spambots. You need JavaScript enabled to view it. from the beginning of September.

To conclude my remarks and the upcoming generational change, one last memory: At the height of the pandemic in May 2021, I managed to visit my son Florian during his Master’s degree program in Oxford despite all the travel restrictions. One evening, I sat down to dinner with him and ten of his fellow students in the Magdalen Arms pub in Oxford. In the lively discussion with young people from all over the world, Gustavo, a fellow student from El Salvador, remarked that my son and I were strikingly similar in character. Siwar, a student from Jordan, replied in a flash: “No, not similar, IDENTICAL!” Dear clients, even though Florian is, of course, not a clone of me and we are naturally not “identical”, we are so close in our thinking and convictions that you can continue to count on our honest, transparent and highly professional service in the future. The journey of the leading independent Swiss asset manager under the “Hotz” brand will continue – we look forward to travelling it with you.

To you, my dear clients, I would like to express my sincere thanks that you will continue to place your trust in my great team, my successor Florian and myself. We look forward to continuing our collaboration! I assure you that you will not regret it – especially in light of your future need to transfer your assets responsibly to your successors or heirs. As in the past, and as always, we will ensure that all our efforts are fully aligned with the interests and wellbeing of our fantastic clients. We wish you and your loved ones a wonderful summer and the very best of health.

With kind regards, on behalf of the entire “Hotz Team”. Your

Dr Pirmin Hotz