New player in corporate activism?
As part of their standard monetary policy procedure the Swiss National Bank has amassed an equity portfolio valued well over chf 130 billion. According to some sources this makes the SNB the eighth largest public investors. Investing remains passive based on indices tracking. Investing is heavily skewed toward the US with 13F filed 31/03/2017 showing markets value of $80bn in 2534 securities.
SNB's Andrea Maechler has stated the SNB avoids banks to avoid conflict of interest. The SNB had begun to purchase stocks in 2005 after a change in Switzerland banking laws, which allow it to purchase assets outside of short term bonds. Maechler has stated that the bank has begun to vote by proxy in 2015. However, reviewing publicly-released speeches, there is scant guidance on voting procedures. While the SNB's holds are not concentrated, the natural size makes them a force. A fact not lost on activist investors.
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Yesterday in an open letter a group of NGOs called on the SNB (or proxyholders) to use its voting rights at the Annual Meeting of Chevron to “mitigate climate change and respect for human and environmental rights.” It then goes on to list the four proposals which they requested the SNB to vote in favour on.
At this point we have not heard a response from the SNB on this request. Today is XOM annual meeting of shareholders were the SNB is holding 15.56 million shares. It is unclear how the SNB will vote on the nine shareholder proposals, election of directors, executive compensations, etc. In the past the Fed and ECB has steered clear of owning single shares for just this conflict of interest. It will be interesting to see how the SNB will handle this issue.
Author
Peter A Rosenstreich
Swissquote Bank Ltd
Peter Rosenstreich is Swissquote Bank’s Head of Market Strategy and manages the global strategy desk; he has held various positions in several banking institutions in the United States, Europe & Asia.
