Thursday, 27 October 2016
Last updated 11 hours ago
Feb 7 2013 | 9:41am ET
Renaissance Technologies' Edmond Offermann is rustling feathers in his favorite Alpine ski resort.
Offermann two years ago invested 15 million Swiss francs to take a 39% stake in the ski-lift company in Sass-Fee, near the Italian border. Like many Swiss ski resorts, Saas-Fee is struggling with antiquated ski lifts and the strength of the franc, which has made a lift ticket there cost more than even the most expensive Austrian resorts.
But Offermann's insistent focus on the bottom line, and his throwing his financial weight around, isn't sitting well with Saas-Feers, who, like many Swiss, are used to a more local approach to running things, Bloomberg News reports.
"Why should one person be able to say what's going on in the village?" Tobias Zubriggen, a Saas-Fee hotelier, asked. "People don't like that here."
"Everybody should give his or her input, but in the end, the decision process isn't a democracy," Offermann, who visits the village of 1,700 five times a year to attend board meetings, told Bloomberg. "It has to be weighted by the stake one has in the venture."
Rainer Flaig, the banker Offermann has hired to restructure Saas-Fee Bergbahnen, said the old model simply doesn't work anymore, a problem exacerbated by the strength of the franc.
"The market is moving away from Switzerland faster than we are ready to do the restructuring," he said. Pointing to the 350 boards governing 550 ski-lift operators in the country, Flaig notes, "if you allowed these kinds of figures in any other industry, the companies would no longer be in business."
In Saas-Fee, overnight stays fell to their lowest level in 36 years in 2011, in spite of its slopes being ranked the second best in the Alpine region by Mountain Management Consulting. Saas-Fee Bergbahnen has cut its workforce from 130 to about 100, as revenue fell 7.5% in the 2010-11 ski season.
Offermann has proposed upgrading Saas-Fee's ski lifts and building a cable-car to connect the village with nearby Zermatt, which sits on the slops of the Matterhorn. Of his hobby that "got out of control," Offermann says, "we just have to show a return. There's just no way around it."