"We have learned an enormous amount from Warren Buffett"

Georg von Wyss
Partner and Portfolio Manager at BWM AG

 

Mr. von Wyss, you started your own business with BWM Value Investing 25 years ago. What was the Swiss asset management landscape like back then?

At that time there were hardly any small, independent fund managers. Our request to the Swiss Federal Banking Commission (SFBC; today FINMA) came as quite a surprise. They held out the prospect of a nine-month authorization process, even though the new fund law at the time was supposed to promote start-ups like us. So we ended up in Liechtenstein, where the decision-making process was much shorter, without any loss of diligence.

BWM Value Investing is considered one of the showpieces in Swiss asset management that has successfully occupied a niche. Did this focus on value investing happen consciously?

Yes and no. I was a convinced practitioner of this style right from the start, but my founding partner, Thomas Braun, was less strict about it in the first year. It was only negative experiences with some stocks that we bought at a small discount to intrinsic value and which then sank to the 40% discount we demand today that set us on our current course.

What distinguishes this style in terms of portfolio management?

Great discipline and simplicity. We buy at a discount of around 40% to intrinsic value and sell when intrinsic value is reached, or we find something better. The discussions always revolve around the intrinsic values of the stocks, defined as normal valuation under normal circumstances. We almost completely spare ourselves the eternal, ultimately sterile, discussions on market timing.

How do you assess the general conditions for Swiss asset managers regarding international competitiveness?

Within the country we don't have a problem, because there are many good people and there is a lot of knowledge. Cross-border it becomes difficult. The funds themselves are licensed in Germany and Austria, but BWM AG, as their asset manager, is not allowed to appear in public without its own licence. Like so many regulations, this is Kafkaesque, but that's the way it is.

What advice would you give to someone who wants to start and build their own asset management company?

Focus on a niche, and only start when you have enough money together to cover the fixed costs from the revenues.

What drives you anew every morning?

What drives me is the goal of achieving excellent performance again. The environment of falling interest rates has almost made that impossible in recent years. But now the conditions are right again so that the enormous undervaluations of our companies can be recognised. This revaluation process has already affected the energy and commodities sectors - mainly due to the war - but in all others the potential is still huge.

You may forgive this question: Is Warren Buffett, the value investor par excellence, a role model for you?

More like a teacher. We have learned an enormous amount from him, Ben Graham and other greats of value investing.

On a working day: What time do you look at the stock market prices for the first time, and when was the last time?

I certainly look at the Bloomberg terminal after the opening and then every now and then during the day. If there's nothing special going on, it's a little break like that, but if I'm fully absorbed in a dossier, I sometimes forget about the stock market altogether. I usually watch the end of the day in New York, too.

Which book is on your bedside table?

Goethe's Elective Affinities.