The Richest Family Offices - Bloomberg

The Richest Family Offices - Bloomberg

Geneva Mansions Sell at Discount as Tax Scares Expats - Bloomberg

Of course 'at a discount' in Geneva is all relative...

Asking prices for luxury homes in Geneva fell by an average of 9 percent to 14,829 francs per square meter since peaking in 2011

Geneva Mansions Sell at Discount as Tax Scares Expats

By Simeon Bennett and Giles Broom - Aug 26, 2013

Real estate broker Alexander Koch de Gooreynd relayed a difficult message to a client last June: the 39.5 million Swiss-franc ($43 million) asking price for his eight-bedroom lakefront villa in Geneva was too high.
The 8,600 square-foot (800 square-meter) home with yacht mooring, wine cellar and kennels in Collonge-Bellerive, where Saudi Arabia’s King Fahd built a summer palace in the 1970s, had been on the market for nine months. The seller took his advice and the house sold for 31.5 million francs in December.
“The heady days are over,” said Koch de Gooreynd, head of London-based Knight Frank LLP’s Swiss residential team, adding that the house might have fetched the higher price two years ago. “Vendors are becoming much more realistic.”
Geneva luxury-home prices, among the highest in the country, are tumbling as buyers are spooked by proposals to end tax breaks for foreign millionaires and the number of multinationals moving to the city slows. Houses in Geneva worth at least 6 million francs have declined by as much as 25 percent in the past 12 months, said Sebastien Rohner, a Geneva-based broker at Barnes International Luxury Real Estate.
“I’ve never known a slump like this before,” Rohner said. “Wealthy people are still attracted to Geneva, but they are taking their time and renting before buying.”

Market Stagnation

The slump in Geneva’s luxury market comes as the average house price in the city declined 1 percent to 2.6 million francs in the first half of 2013 from a record high in 2011, according to data compiled by Wuest & Partner AG, a real estate consulting firm with offices in Geneva and Zurich. House prices in Geneva more than doubled in the previous 13 years, while values in the rest of Switzerland rose 53 percent, Wuest & Partner’s figures show.
“In regions like Zurich and Lake Geneva, where house prices have reached a pretty high level, there is stagnation or a modest correction,” said Robert Weinert, a market analyst at Wuest & Partner in Zurich. “Prices have reached a level where not many people can afford them.”
UBS AG (UBSN)’s Swiss Real Estate Bubble Index rose in the second quarter as mortgage lending in Switzerland increased 4.3 percent from a year earlier, exceeding a gain in disposable household income of 1.4 percent, the country’s biggest bank said on Aug. 5.
To prevent a repeat of the property-market crisis of the 1990s, which hobbled economic growth for years, the Swiss National Bank sponsored the introduction in February of a capital buffer, which forces lenders to hold an extra 1 percent of risk-weighted assets tied to residential mortgages.

Cooling Market

That helped cool Geneva’s housing market by pushing up the 10-year fixed home loan rate to 2.4 percent from 1.8 percent in February, Weinert said.
Geneva, less than a two-hour drive from the ski resorts of Chamonix and Verbier, has used low taxes, political stability and quality of life to lure more than 900 multinationals, including Procter & Gamble Co. (PG), commodity traders such as Gunvor SA and hedge fund managers, Brevan Howard and BlueCrest Capital Management LLP. In 2009, Dinara Kulibayeva, second daughter of Kazakh President Nursultan Nazarbayev and the billionaire owner of Halyk Savings Bank, bought a house in the Geneva suburb of Anieres for a record 74.7 million francs.
The influx of expatriates has slowed, sapping demand, said Claudio Saputelli, an economist at UBS in Zurich and co-author of the bank’s quarterly bubble index report.
“We’re not seeing as many expats moving to Geneva,” said Saputelli. “The market has become more and more difficult for high-end apartments.”

Tax Break

Germany’s Merck KGaA last year announced plans to close the Serono unit it bought from billionaire Ernesto Bertarelli in 2007, resulting in the loss of 1,250 jobs in Geneva.
Wealthy foreigners were also drawn to Geneva by a 150-year-old tax break that enables them to avoid paying income tax via an expenditure-based levy known as a forfait. Geneva’s Socialist Party in January 2012 submitted the 10,000 signatures necessary to force a vote on abolishing the program. While the Geneva government and a majority of the canton’s lawmakers voted in June to reject that proposal, the initiative prompted the canton to consider revising the tax break by September 2014.
“This indecision, it kills the market,” Koch de Gooreynd said. “It’s any concern that things might be about to change.”
After Zurich became the first canton to abolish the forfait in 2009, with almost 53 percent voting against the system, 97 of the 201 beneficiaries of the tax left the canton. About two-thirds of them relocated to other parts of Switzerland.

Negotiating Room

Asking prices for luxury homes in Geneva fell by an average of 9 percent to 14,829 francs per square meter since peaking in 2011, according to UBS. In the suburbs of Florissant and Malagnou, east of Geneva’s old town, the drop was 24 percent.
The decline is probably even steeper because the numbers are based on advertised asking prices and weaker demand is enabling buyers to negotiate better deals, said Saputelli.
“More and more prices are under discussion,” Saputelli said in a phone interview. “That wasn’t the case two or three years ago, when demand was so high that you had no chance to bargain the price down.”
The decline will probably continue for another 12 months, said Christian Kraft, head of Swiss retail estate research at Credit Suisse Group AG. (CSGN)

Scared Buyers

The number of new buyers has fallen by half, said David Colle, managing director of Luxury Places, a Geneva-based brokerage. “People are scared a little bit, they’re just waiting,” he said. “There’s less demand, there’s less buyers coming every day to us.”
In Cologny, another of Geneva’s millionaire lakeside suburbs, there are 10 to 15 homes on the market for more than 10 million francs compared with just one or two back in 2011, Knight Frank’s Koch de Gooreynd said.
“Buyers are increasingly savvy now, especially with such a big selection out there,” he said. “Still, Switzerland remains one of the key markets for people to invest, relocate their business and bring their families due to the safe and secure environment, stable economy and the high quality of life available.”
To contact the reporters on this story: Simeon Bennett in Geneva at sbennett9@bloomberg.net; Giles Broom in Geneva at gbroom@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Phil Serafino at pserafino@bloomberg.net; Rob Urban at robprag@bloomberg.net.

®2013 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Geneva Mansions Sell at Discount as Tax Scares Expats - Bloomberg


The Pangea Advisors Blog

Decisions are worthless … unless you turn them into commitments.

Broken commitments damage tasks, relationships, and culture. 

Are You Making This Mistake at the End of Your Meetings? | LinkedIn

Five frogs are sitting on a log. Four decide to jump off. How many are left? Five, because deciding is different than doing.”

Decisions are worthless … unless you turn them into commitments.

In a business conversation, your counterpart's decision states his intention, but a commitment holds him accountable. Although a commitment does not guarantee delivery, it’s far more reliable than a decision. More importantly, when managed properly, it allows you to handle breakdowns with effectiveness, trust and integrity.

Have you been in meetings where lots of decisions are made but nothing gets done andnobody is held accountable? Unless you finish the meeting with commitments about“who will do what by when,” you’ve just built 90% of a bridge.

Broken commitments damage tasks, relationships, and culture. They bring about inefficiencies, mistrust, and corruption. Coordination suffers, collaboration suffers, and cohesion suffers. You can avoid this suffering – if you finish every conversation with clear commitments.

Read the whole piece on Linkedin:  Are You Making This Mistake at the End of Your Meetings? | LinkedIn

#Falciani and his stolen data from #Swiss #Banks

From The International Herald Tribune:

Fugitive can name names of Swiss bank account holders

BY DOREEN CARVAJAL AND RAPHAEL MINDER

PARIS — Hervé Falciani is a professed whistle-blower — the Edward Snowden of banking — who has been hunted by Swiss investigators, jailed by Spaniards and claims to have been kidnapped by Israeli Mossad agents eager for a glimpse of the client data he stole while working for a major financial institution in Geneva.

‘‘I am weak and alone,’’ Mr. Falciani said, as three round-the-clock bodyguards provided by the French government looked on with hard stares. The protection was needed, he insisted, because he faces constant risk as the sole key to decipher the encrypted data — five CD-ROMs containing a list of nearly 130,000 account holders that may be the biggest leak ever in the secretive world of Swiss banking.

But as he settled into a deserted bistro for a two-hour lunch, Mr. Falciani, who has been on the run since 2008, seemed oddly relaxed for a fugitive. And why not?

The former computer technician is in high demand these days, having cast himself as a crusader against the murky world of Swiss banking and money laundering. Once dismissed by many European authorities, he and other whistle-blowers are now being courted as the region’s governments struggle to fill their coffers and to stem a populist backlash against tax evasion and corruption.

‘‘It’s an economic war,’’ said Mr. Falciani, an angular man of 41 with a dark goatee who sometimes dons disguises, though on a muggy summer afternoon favored an innocuous beige tie and short-sleeved dress shirt. ‘‘In Switzerland, the banks are so organized that they are able to circumvent new rules and laws to continue to enable tax evasion.’’

Critics, not least at his former employer HSBC, scorn and dismiss Mr. Falciani as a manipulator more dazzled by money than high ideals. The data he has leaked — some say sold — since 2008 has wreaked havoc within the banking world, as well as the moneyed and political classes of Europe.

Mr. Falciani’s information formed the basis for the now famous ‘‘Lagarde list’’ that has roiled Greek politics with its revelations of oligarchs and politicians who avoided taxes by stashing millions in Switzerland. His data is also credited with helping Spain collect 260 million euros ($345 million) in taxes and identify more than 650 tax evaders, including the president of Banco Santander.

In 2012, Mr. Falciani passed his information to American authorities. They, in turn, used the data to pursue an investigation into whether HSBC flouted controls on money laundering, eventually forcing a $1.92 billion settlement with the bank in December.

More than a few rich and powerful people await his next move. Mr. Falciani asserts that only a small portion of the data has been decrypted and used.

Since being released from jail this year after a Spanish judge denied a Swiss extradition request, Mr. Falciani, who is married and has a young daughter, has resurfaced in France. Authorities here have offered protection in exchange for Mr. Falciani giving testimony to local prosecutors who are investigating whether HSBC helped French clients dodge taxes.

‘‘My main objective is to help authorities develop a defense,’’ Mr. Falciani said.

‘‘We are under attack and losing a lot of tax money,’’ he said of the Swiss banking system. ‘‘If you have enemies who want to invade, laws are not enough and you need armies to build an economic defense.’’

A native of Monaco who was educated in the south of France, Mr. Falciani once worked in obscurity as a computer technician at HSBC. In 2005, he was promoted and transferred to Geneva. The following year, he said he raised concerns to his bosses about security flaws in the Swiss system that could violate the privacy of depositors.

Ignored by his superiors, Mr. Falciani said he started collecting the information methodically, in an effort to prove the system was vulnerable. The bank denies that he ever alerted them and believes that he amassed the information over a two-year period.

Early on, Mr. Falciani said he got the brushoff from German bureaucrats who weren’t interested in his trove of data. His information was also shunned in France by the previous administration when ‘‘authorities tried to make evidence disappear and they didn’t want to know,’’ he said.

Then the European economy slumped and governments started to take notice.

In a report from the French National Assembly issued in July, the lawmaker Christian Eckert chided authorities for being slow to use Mr. Falciani’s list. According to Mr. Eckert, the information included 127,311 clients, including 6,313 from France who were suspected of tax evasion.

HSBC dismisses Mr. Falciani’s information as flawed, insisting the small sample the bank has seen is filled with errors. At the time of his employment, the bank contends it had only 100,000 customers and that the stolen data only affected 15,000 clients.

‘‘To our knowledge it has always been Falciani’s intention to sell the data,’’ David Brügger, a bank spokesman, said in an e-mail statement. ‘‘Only faced with the prospect of extradition and extended time behind bars, Falciani decided to cooperate with the Spanish authorities. A scheme he is now repeating with France and other countries.’’

That theory is echoed by Georgina Mikhael, a former HSBC computer consultant who worked with Mr. Falciani in Geneva.

Ms. Mikhael says she helped Mr. Falciani develop a Hong Kong based company, Palorva, to sell data to other banks, initially believing he obtained the information through what he called ‘‘data mining’’ from the Internet. She said they went to Lebanon in 2008 to sell their services to four banks. She said she grew suspicious when Mr. Falciani insisted on using a false Arabic name, Ruben Al-Chidiack, for their business dealings.

‘‘He never gives something for free,’’ said Ms. Mikhael, who noted that after the Lebanon effort failed Mr. Falciani tried to approach German and French intelligence services, usually carrying a knife in his bag because he feared the risks. ‘‘Always he is asking. He is not Robin Hood.’’

Ms. Mikhael, who is currently unemployed and lives in her native Lebanon, says that she was Mr. Falciani’s mistress, believing that he planned to divorce his wife. She is now pursuing a defamation lawsuit against him in France, stemming from his contention that he was kidnapped by Mossad secret agents in Geneva who were seeking bank information about people with Hezbollah ties, including her. Ms. Mikhael says she does not have Hezbollah ties and is Christian.

Mr. Falciani disputes that he is peddling his information for cash and the claims — pressed by Ms. Mikhael — ‘‘are part of moves that people are keen to play’’ to harm his reputation. ‘‘'Never have I or anyone close to me asked or accepted money for information,’’ he said.

In 2012, Swiss authorities gave Mr. Falciani safe pass to meet in Switzerland to discuss a deal to plead guilty to data theft with a suspended sentence, provided he stopped sharing the information. Mr. Falciani said he strung them along to protect his own safety, waiting for a new government in France that might take his claims more seriously.

Now that the political tide has turned, Mr. Falciani wants to continue working with authorities.

As the investigations play out, Mr. Falciani said he was holding down a day job, working for a European Union project as a computer researcher to develop algorithms to detect abnormal behavior. But he worries about his long-term safety, wondering whether he will live another year. He notes that his house has been broken into and that his wife was recently fired from a job at a shoe store because of his notoriety

‘‘This business represents thousands of billions of euros,’’ he said. ‘‘From my side, I’m frightened.’’ ◼

A Fugitive With a Cause - NYTimes.com