Business

The unique trio ownership of a family office – and its unique investments

Family offices come in all shapes and sizes. But few, if any, are structured like a Swiss family office owned by three of the country’s top investors. And as family offices concentrate their efforts in the private equity and venture, some believe an alternative investment strategy can make them a lot of money. 

The name of the family office, PG3, is a direct reference to the three founding partners of one of the world’s most successful private equity funds, Partners Group. The Zug-based group was founded in 1996 by three former Goldman Sachs bankers: Marcel Erni, Alfred Gantner, and Urs Wietlisbach. Partners has gone on to employ around 1,500 staff and manage close to $100 billion in assets across the globe.

The family office has gone on to build probably one of the biggest, if not the biggest, portfolio of insurance-linked investments in its sector

Its success has made its three founding partners multi-billionaires, providing them with enough money to set up individual family offices. Instead, they set up one family office between the three of them, PG3, in 2013. It has become a rare example of a family office prospering in the competitive, and complex, world of insurance.

Erni, Gantner, and Wietlisbach have expertise in private equity, real estate, infrastructure, and private debt. PG3 has specialised in the esoteric world of insurance investing, in particular insurance-linked securities (ILS). The family office has gone on to build probably one of the biggest, if not the biggest, portfolio of insurance-linked investments in its sector. 

To achieve this, PG3 hired a team of insurance investment specialists led by Samuel Scherling. Scherling, its CEO, gained his expertise in the insurance investment world at the huge insurance group Swiss Re, spending 16 years there in senior risk management roles. 

Scherling went on to work for Zug-based alternative asset manager Alternative Beta Partners before joining the family office. Alternative Beta had been spun out of Partners Group by Lars Jaeger, a well-known Swiss alternative asset manager, as well as a history, science, and financial writer. Jaeger went on to work for listed Anglo-Swiss manager GAM, but a number of his team at Alternative Beta joined PG3, including Markus Schlatter, now a managing director at PG3 and an insurance investment specialist. 

Other insurance investment specialists hired by PG3 included Tibor Winkler, who previously worked at Zurich-based ILS group Secquaero Advisors, bought by Schroders last year. And Ivan Melnychuk, head of insurance finance at PG3 was previously an information systems specialist at Partners Group. 

Insurance-linked securities often get their funding for pension schemes keen to put their capital to work in new areas. They are viewed as an interesting alternative to stocks and bonds by their consultants. 

The capital provided by pension schemes, and others, is accessed by insurers who are keen to lay off some of insurance risks, although they more often use reinsurers, like Swiss Re. They are frequently used to lay off exposure to insurance risk which covers catastrophes, viewed as an increasingly challenging area due to climate change. More on investing in the sector was discussed in detail this week by Family Capital

But insurance is a competitive, and complex, business. To succeed in the world of insurance-linked alternatives, PG3 needed to hire top experts in the field, with experience in senior roles in the sector for years PG3 has done just that – no doubt paying big remuneration packages to do so. 

For most family offices this kind of specialisation is too costly and specialized to contemplate. 

A look through some of the other LinkedIn profiles of other Partners staff suggests there are a number of portfolio managers pursuing portfolio management in public equity. There is no indication of any speciality in venture capital investing. 

Maybe the three founders of Partners just don’t like uncertainties relating to the asset class – at least at a startup level. 

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