Royal family you’ve never heard of builds $300B finance empire

The top royal for one of the worlds smallest nations heads a multibillion-dollar dynasty dating back almost 1,000 years thats endured through wars, floods and scandals.

Today, the finance empire behind Liechtensteins Prince Hans-Adam II is flourishing from its main area of expertise: managing money for the worlds super-rich.

LGT Group, the royal familys private banking and asset-management firm, reported record assets under management last month of almost 306 billion Swiss francs ($334 billion) as of June 30, a 6% increase since the end of last year.

The Vaduz-based firm this month closed on the purchase of Abrdn Plcs discretionary fund-management business in the UK and Jersey, adding to at least three other external investments since 2021.

We continue to look, Olivier de Perregaux, 58, chief executive officer of LGT Private Banking, said in a recent interview. We are, however, primarily focusing on organic growth.

DOUBLED AUM

LGTs rapid growth mirrors a comeback of sorts for Liechtenstein, a tiny Alpine nation of 39,000 inhabitants that once ranked among the worlds most notorious tax havens.

The roughly century-old firm more than doubled assets under management and operating income in the past decade, rebounding from its business spluttering after the US and other nations targeted offshore financial centers following the 2008 financial crisis.

LGT is among the firms poaching Credit Suisse staff after the Zurich-based lender collapsed and was acquired by UBS Group AG, helping to boost its headcount to about 5,000. In August, former Credit Suisse executive Ajay Punjabi joined LGTs India wealth unit, one of at least a half-dozen of the Swiss banks former employees to join the firm this year. 

We are hiring intensely, de Perregaux said. The Credit Suisse-UBS deal is by no means the only growth vector we have.

LGTs momentum is also helping Prince Hans-Adam climb the ranks of the ultra-wealthy, strengthening the 78-year-olds status as Europes richest royal.

The prince, LGTs sole beneficiary, is now the worlds 215-richest person with a fortune of about $9.2 billion 71 spots higher than at the start of this year, according to the Bloomberg Billionaires Index. 

OLDEST FORTUNE

Unlike other European monarchs, such as Britains King Charles III, the prince owns his familys most valuable assets personally, making it the oldest fortune on Bloombergs wealth ranking.

The prince and his familys wealth originated with land acquired in the 12th century that at one point spread across a wide swath of whats now Germany, Austria, Hungary and the Czech Republic. LGT started in 1921 with 10 employees, and the royal family bought it about a decade later, during the Great Depression. 

Prince Hans-Adam took LGTs reins in the 1970s when his father charged him with reorganizing the family empire, which was in shambles thanks to expropriations during World War II and mismanagement. After stabilizing the firm, the former London bank trainee expanded it outside his home nation, opening its first international branch in Hong Kong in 1986 soon before he ascended the throne as Liechtensteins sovereign prince.

Beyond LGT, where the prince and his family are the biggest clients, Liechtenteins royal dynasty still owns land and real estate, including a castle overlooking the Rhine River.

Theyve also amassed a major art collection with works from Anthony van Dyck, Peter Paul Rubens and Bartolome Esteban Murillo, though their finance empire is the driving force behind their fortune. LGTs value has surged almost 25% this year, according to Bloombergs wealth index, outperforming the MSCI World Bank Index.

Like Switzerland, Liechtenstein was once known for its bank secrecy laws, but the principality boosted its transparency after data stolen from LGT was used by Germany to prosecute tax evaders in 2008. 

LGT, Liechtensteins biggest bank, saw clients pull money around that time but reversed the trend in 2010. From the end of that year to 2012, LGT added about 22 billion Swiss francs in net inflows, more than triple the sum for the prior three years, according to data compiled by Bloomberg.

Prince Hans-Adams second-oldest son, Max, a 54 year-old former JPMorgan Chase & Co. banker, is now chairman of LGT Group, which makes most of its money from wealth management and also has an impact-investment arm.

He and his family are involved in major decisions for their finance empire, including the purchase of UBSs Austria wealth-management business in 2021 and similar deals completed last year for Australias Crestone and Indias Validus Wealth.

LGT also returned to Germany in 2022 with the launch of a private-banking office in Hamburg. The firm plans to continue expanding globally, though its unlikely it will enter any new markets in the near future.

We are where we want to be in terms of regions, de Perregaux said. Now its more about growing out of those locations.