Private Equity Billionaires Seek to Torpedo Swiss-EU Talks

(Bloomberg) —

Switzerland’s efforts to forge a new deal to govern relations with the European Union have run into substantial new opposition, in the form of the three billionaire founders of Partners Group Holding AG.

Alfred Gantner, Marcel Erni and Urs Wietlisbach, Goldman Sachs Group Inc. alumni who’ve built one of Europe’s most valuable private finance firms, are leading a new political campaign that could limit the Swiss government’s room for maneuver in talks due to conclude by the end of this year. 

The “Kompass Europa” organization, backed by the private equity billionaires and other entrepreneurial figures is arguing that any treaty with a foreign power should pass not just a plebiscite — a standard feature of Swiss direct democracy — but also win a majority of the regional governments, or cantons.

That’s a hurdle that any deal with Brussels that includes free movement of people — a toxic issue in immigration-wary Switzerland — is unlikely to clear.

The fact that heavyweight business leaders are coming out now against a revamp of the complex web of Swiss relations with the bloc shatters the view that business in general is pro-EU. Their intervention could prove decisive when the country heads into a vote, even if the group doesn’t immediately influence negotiations. 

“There are many forces in this country who actually don’t want to change the status quo,” said Michael Herrmann, a pollster who conducts surveys for Swiss public TV. “Switzerland doesn’t want to move, but still to participate a little. This can take on a momentum of its own.”

The current situation is the result of what a Swiss newspaper recently called “thirty years of disarticulated tango between Bern and Brussels” — a vast array of bilateral agreements governing everything from access to the bloc’s single market to freedom of movement and financial regulation. While they broadly work, the EU remains unhappy with the hodgepodge approach and cross-border businesses face legal uncertainties.

Kompass Europa contends that Switzerland’s sovereignty and direct democratic system are the guarantors of its prosperity — and that it shouldn’t be reliant on the EU nor be a “passive” subject of its laws.

Gantner, Erni and Wietlisbach each own a roughly 5% stake in Partners Group, a listed private finance firm operating a global portfolio in private equity, real estate, infrastructure and private credit. The Zug, Switzerland-based firm’s market capitalization of 34 billion Swiss francs ($39.6 billion) makes their stakes worth about 2 billion francs each, data compiled by Bloomberg show. 

The company maintains that the political engagement of its founders is a personal matter.

“The framework agreement has absolutely no relevance or influence on the global business of Partners Group,” a spokesman for the company said. 

In a newspaper interview published earlier this month, Gantner argued that broadly accepting EU law “damages Switzerland.”

By speaking up against any revamp of Switzerland’s relationship with the EU, after a previous effort fell apart in 2021 following years of talks, Kompass Europa is aligning in some respects with Swiss traditionalists and the far right. The objections of these groups are more strongly focused on the fraught issue of immigration, though. 

The EU has made clear that Switzerland won’t get a unilateral power to stop newcomers arriving from the bloc in the updated agreement. Officials insist the entire negotiated package of treaties is off the table if the Swiss don’t back down, according to people familiar with the situation.

But as the country in fact depends on workers from abroad, skepticism on immigration is not usually shared by many business leaders. A prominent example is Roche Holding AG’s Chief Executive Officer Thomas Schinecker, who said on Wednesday the pharma heavyweight wouldn’t have a “lengthy discussion” what to do if Switzerland resigned from the free movement of persons.

“We have to hire people. And we have to hire them where we can get them. And if we can’t get them in Switzerland, we have to hire them somewhere else,” he said. “I don’t mean that as a threat, by the way. It’s simply a reality.”

EU ministers will discuss on October 15 what the negotiations have achieved so far. The Swiss government is expected to take stock early next month. A looming deadline is then the end of the year, by when both sides have said they want to finish — if the Swiss government doesn’t decide to leave the table before that.

In Switzerland, the actual battle will only begin if and when an agreement is reached. A deal would be debated in parliament next year, and a vote is expected in 2026. The presumably heated campaign leading up to it could well be influenced by the money of the Partners Group billionaires.

Yet there’s skepticism that their financial clout will be able to tip the debate decisively. Their initiative has no guarantee of being adopted. 

“That they are coming forward now is a coordinated action to say that business is not unified behind a new agreement,” said Georg Lutz, a professor of political science at the University of Lausanne. “Money can help to bring arguments to the population, but if the message is wrong then it doesn’t help anyway.”

 

–With assistance from Sonja Wind and Jorge Valero.

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