Inrate, the Swiss ESG (environmental, social and governance) research firm, has broken into the country’s proxy services market by acquiring the corporate governance research and voting arm of zCapital, a Swiss equity manager based in Zug.
In the deal, for which financial details were not disclosed, zCapital has been split in two. Inrate is taking over zCapital’s governance research and voting business – now renamed zRating – while zCapital continues as an equity manager with CHF600m (€491m) in assets. Both firms will remain in Zug.
Gregor Greber, who until yesterday (May 21) was zCapital’s chief executive, has been named as zRating’s CEO and joins Inrate’s five-member board. Greber’s deputy is Michael Otte, who will be in charge of zRating’s proxy services, and the company expects to add two more specialists by October.
“Due to increased demand for proxy services, it is important to avoid any potential conflicts of interest, which is why zCapital’s asset management was separated from the research and voting business,” said Greber, at an Inrate event in Zurich this morning after the deal was announced.
Greber’s arrival at Inrate also means the departure of Philippe Spicher, who has been Inrate’s CEO since 2010.
Speaking at the event, Peter Beriger, CEO of Swiss sustainable pension fund Nest, a co-founder of Inrate,said Spicher would take on a new “career challenge”, though he was not more specific. Other Swiss proxy firms that Inrate will now compete with include pension fund-backed Ethos, a Geneva-based firm that is the market leader, and the Corporate Governance Agentur Schweiz (CGAS), with which Inrate has a cooperation deal.
Inrate’s arrangement with zRating is similar in some ways to that in March between GES, the Swedish engagement firm, and Governance for Owners (GO), a UK company that provided both asset management and engagement/voting services. GO’s latter business was acquired by GES, resulting in the departure of former GO CEO Stephen Cohen.
In related news, zRating has unveiled its latest governance rankings for 150 listed Swiss firms. According to zRating’s list, Geberit and chemical/drugs firm Lonza are among the best managed Swiss firms, while watchmaking giant Swatch and chocolatier Lindt & Sprüngli are among the worst.
In scoring Swiss companies on their governance, zRating relies on such criteria as “one share, one vote”; reporting transparency; split of the chairman from the chief executive; and the extent to which the company has implemented Switzerland’s new rules on executive pay, known collectively as the “Minder initiative.”