It started out as a “national bank” with an international clientele, and went on to become the bank of the Princely Family: the early years of Bank in Liechtenstein shaped its current identity and laid the foundations for its future growth.
Liechtenstein in the 1920
participate in the war, it suffered the consequences thereof as a result of its customs and currency union with the Austro-Hungarian monarchy, which had been in place since 1852.
The “national bank” becomes BiL
While the plans for the Liechtenstein currency were soon abandoned, on 30 August 1920, a consortium led by the Anglo-Österreichische Bank received authorization to found a new bank. It was initially to be named “Nationalbank des Fürstentums Liechtenstein”, but a more succinct name was later agreed upon: Bank in Liechtenstein, or BiL for short..
Bank in Liechtenstein (BiL) launched its business operations in May 1921. Its ten employees worked in the govern-ment building.
Acquisition by the Princely House
The 1929 global economic crisis had substantial negative repercussions for the Principality, and the bank’s sharehold-ers found themselves in financial difficulty. When a German financial and industrial institution took an interest in the struggling bank, the nation took notice. Concerns emerged that the institution, conceived as Liechtenstein’s “national bank”, could soon be in foreign hands.
After the global economic crisis, representatives of the bank and the Principality’s government made a bold decision: in 1930, they turned to their head of state, Prince Franz I. The group asked him to increase his shareholding. And he did: the Prince acquired additional shares and the Princely House of Liechtenstein became the majority shareholder of BiL.
A growing family
In 1950, BiL had 19 employees. By 1980, it counted 200. In 1990, the bank employed 466 people. This growth was the result of acquisitions, but also of organic growth at its locations – above all Liechtenstein, where the group-wide back office functions were located. The small offices in Vaduz soon became crowded, leading LGT to open its new Service Center in Bendern in April 1996
To a certain extent, LGT owes its name to a happy coincidence: the bank wanted to gain a diversified foothold in global fund management. In 1989, the Prince of Liechtenstein Foundation therefore bought the London-based fund management company GT Management – named after its founders Tom Griffin and Richard Thornton – for GBP 92.5 million. The initials GT can easily be changed to stand for “Global Trust”. Soon afterwards, the two organizations were merged to form BiL GT Group AG. Christian Norgren emphasized that the takeover was a friendly one, saying: “Both parties were able to help shape the foundations of this ‘marriage’.” In 1996, the Group acquired the New York asset man-agement company Chancellor Capital Management for USD 300 million and the Group was renamed Liechtenstein Global Trust – or LGT for short.
While GT primarily served institutional clients in England, Asia and the US, BiL had a strong foothold in continental Europe, direct access to private clients and banking licenses in a number of countries. In one fell swoop, the acquisition of GT thus created a banking group with a focus on portfolio management and investment advisory, which offered its services globally, and catered to both private and institutional clients. In addition, the holding structure prevented the parent company and its subsidiaries in Switzerland and abroad from ballooning in terms of bureaucracy. At that time, GT had around 400 employees, and BiL had around 400 in Vaduz and 400 abroad. Against the back-drop of rapid and fundamental changes in the asset management industry, the asset management division was sold in 1998.
After the sale of GT, the Princely House mandated the bank to manage the proceeds, which amounted to around one billion dollars. The concept behind this so-called Princely Portfolio is similar to that of American ivy league endowment funds: invested worldwide with a very long-term investment horizon and broadly diversified across a wide range of asset classes.
This broad diversification also meant that for the time, an unusually high share (around 40 percent) was invested in alternative investments – primarily hedge funds and private equity. The aim of the strategy was asset preservation, while the returns were to correspond to those of a pure equity portfolio – but with less risk.
Only the best managers
Recognizing that it is impossible for a single asset manager to be a leader in all asset classes, LGT made a groundbreaking decision: it would work with the leading global portfolio managers in each asset class.
About a year after its launch, the Princely Portfolio was made available to clients and employees. This co-investment approach means that the Princely Family, clients and employees invest side by side according to the same investment strategy.
The foundation and growth of LGT Capital Partners
This is when today’s LGT Capital Partners effectively came into being. Before becoming a separate entity in 2021, Capital Partners was the asset management arm of LGT Group and initially operated with only a few employees from a small office at the headquarters in Vaduz. In 2000, it moved its headquarters to Pfäffikon on Lake Zurich. This marked the beginning of a period of impressive international growth, initially with one unit dedicated to traditional asset classes and one to alternatives.
In the decades that followed, LGT Capital Partners systematically grew its expertise – particularly in alternative investments – and developed into one of the leading players in private markets, liquid alternative investments and multi-asset solutions. In 2020, LGT Capital Partners employed around 450 staff from more than 50 countries and had 11 offices in major international financial centers.
H.S.H. Prinz Max von und zu Liechtenstein, Chairman LGT
"Working on further developing the company is something I have always enjoyed. There is no secret to it, really. I have always been lucky to work with a very good team. And our employees have made the biggest contribution to our success."