Fisch Asset Management is a beacon for Swiss investment boutiques. Initially, the company wasn't taken seriously, co-founder Pius Fischer told finews.ch in an interview. An important pillar of its success was to do very little, but that extremely well. And his employees need to know everything – absolutely everything.

Mister Fisch, we're at your Zurich offices and there is construction noise emanating from downstairs. Are you expanding?

Yes, we are. Space today is already sparse, with 70 employees. And we aim to increase our headcount to 100.

Are convertible bonds that much in demand?

Let me put it that way: We need to be prepared for strongly increasing demand.

So you see demand rising?

We expect growth because recently we pressed on hard with our internationalization strategy. The starting point however was the decision by Bank Schroders in 2013 to assume the management of the convertible bonds themselves.

«Ready for Expansion»

This decision didn't hurt us that much but made us think. The aim was to become more international and to attract the best investors worldwide.

What have you achieved so far?

We hired people who know markets we didn't and started cooperations in some specific countries. At the same time, we need to adjust our internal structures to make us ready for the expansion.

And what about the best investors of the world?

We believe the established U.S. family offices to be the most professional investors. We would be proud to count them as our clients. But we aren't there yet. The U.S. is an interesting market, but very demanding for an asset manager of our size and specific focus, demanding in regard to resources you need. We currently have no plans for the U.S., but nothing is impossible.

When you as asset manager started with convertible bonds it might also have looked impossible?

What my brother Kurt and I wanted to do then was not normal for our industry. We were two guys with one computer and a clear idea: we do almost nothing, but that we do well: asset management with convertible bonds.

What was so special about it?

We could have been a typical wealth manager. But we only wanted institutional clients and therefore accepted lower margins. That made many people laugh about us. But we had a clear focus. At the beginning, we also offered funds of hedge funds, primarily managed futures. We had products that ought to outperform in bad times.

When we won pension funds as customers, we decided to concentrate solely on convertible bonds. It proved to be the right decision. Fisch and convertible bonds belong to each other.

«Good Asset Management and Fun»

Meanwhile we extended our expertise to corporate bonds, applying our knowledge about loan analysis to new products as a means to diversify healthily. Our claim hasn't changed though.

You've become the asset management boutique of Switzerland. Was that your goal?

No, our goal was good asset management and to have fun. We were convinced about convertible bonds as a good investment. It was an opportunity, because it's a niche too small for the big players. At the beginning, we didn't have any marketing or sales organisation.

It was important to do asset management well. If you're well positioned, the rest will follow, including client assets. We took a long time to understand how important good sales staff are. Today, we have 8.5 billion francs under management.

What is the defining characteristic of a boutique?

A radical philosophy is a condition for this.

Can you explain yours?

Asset management is at its core. Everything else is subject to it. It was clear from day one that we couldn't have any conflicts of interest. That would have been the worst case scenario. It proved relatively simple to achieve in respect to our clients. We never earned any money trading. This approach made us exotic in the 1990s.

«We Have All the Same Goal»

Our company has the same interests as our clients and therefore we don't need to implement the new rules such as Mifid. It is harder to avoid conflicts of interest within the company.

How's that?

Because it means that all employees have the same goal, which is not the success of the individual, but the success of the company.

Which you have achieved?

It is a permanent process, but we've achieved a lot thanks to two measures. First: We strive for absolute transparency. Second: Every employee is made an entrepreneur, participating in the turnover of the company, and they are all able to buy shares.

Transparency as a condition for entrepreneurial conduct of employees?

Yes, everybody needs to know everything. You can't demand employees to think and act like an entrepreneur if you don't tell him everything about the company.

Every employee at Fisch know everything that happens at the company?

Yes, everything. Quarterly and annual figures are available for all to see, the minutes of executive and board meetings, salaries and bonuses are open as well. Everything is transparent except the content of employee appraisals.

The advantage of transparency is that conflicts break out earlier and can be solved earlier. If you tell somebody, why his colleague earns more, you need to have comprehensible measures of qualification. Normally, employees accept such comparisons. Those who don't, leave the company.

Does this happen frequently?

We have very low fluctuation rates, but it has happened.

And what's the advantage of wage transparency?

It is part of our goal: We literally want everybody to climb the same mountain. Transparency has nothing to do with altruism. Transparency has to add something extra.

Why don't you use wage incentives?

We do. Part of our turnover goes into a pot that is paid out as an extra salary on a quarterly basis. The advantages are first that each new customers is being felt very directly. Second, our fixed costs are lower because as sales drop, so do wages. Third: As we share the pot with all employees on a quarterly basis, they participate directly in the success of the past three months.

Are you paying the wages of a boutique?

Lower charges are earning above average wages, in the upper management our compensation is lower than is usual in the market. But we hand out shares as entrepreneurial part of their compensation. That way, some of our employees by now hold a nice stake in Fisch Asset Management AG.

But you and your brother are still in overall control of the company?

Yes, but we may lose it one day because of the share distribution scheme.

In the 21 years of existence, did you once fundamentally question your work?

No, but the financial crisis hit us hard. There were loads of investors in the hedge fund segment. They sold everything to maintain liquidity. We had to watch this happening, which wasn't easy.

Pius Fisch is a lawyer with a focus on international law. Before founding Fisch Asset Management with brother Kurt in 1994, Pius Fischer worked for Zürich Versicherung. Fisch is chairman of Fisch Asset Management and in charge of the development of new products. He describes himself as a family man, loves cooking.