Dieter Wemmer is capping an illustrious finance career with a seat on UBS’ board. He is also partnering with a fearsome hedge fund – which may soon roil the financial industry. In the Netherlands, the mention of Elliot Management is synonymous with unwelcome activism: the U.S.-based hedge fund in 2017 attempted to force AkzoNobel into an unwanted merger with American PPG Industries. The warring factions buried the hatchet – via a lengthy court battle.
Elliott has a new target: it snapped up three percent of the largest Dutch insurer NN in February. Last month, Elliott called for NN to cut costs and to boost cash flow by taking more risk in its bond portfolio, in a website devoted to the campaign dubbed the time is now.
Led by Paul Singer, Elliott has marshaled influential support for its efforts – Dieter Wemmer supports the U.S. hedge fund, and also bought a small stake in NN. There are ways to generate higher investment returns without taking on unusual risks, the German-Swiss executive told Dutch daily NRC Handelsblad last month.
Wemmer and the activist fund are a surprising match, and a coup for Elliott: the 63-year-old looks back on a distinguished executive career in the insurance industry. He worked his way up to finance chief of Swiss insurer Zurich, where he was a leading contender to replace then-CEO James Schiro. Zurich’s board in 2010 picked Martin Senn instead – a five-year tenure that ended quietly in 2015 (Senn died by suicide six months later).
Wemmer, a Cologne native, had moved to Allianz as their finance chief in 2011, a role he inhabited until reaching retirement age three years ago. He had in 2016 been elected to UBS’ board, where he is a member of the governance and nomination committee (as well as audit and pay bodies).
The Rhinelander’s career enshrined him into Europe’s financial establishment, and Wemmer is also highly thought of both because he is sharp as a tack (he has a Ph.D. in mathematics) and because he is an excellent manager. In 2012, he was elected Swiss blue-chip finance boss of the year by CFO Forum. Those who have worked for Wemmer, who didn’t respond to a request for comment about his plans with Elliott, speak glowingly of him.
Wemmer signaled a conciliatory stance in his comments to NRC Handelsblad about NN: «The team can either listen to us or ignore us (…) we trust the company and the management.» Given Elliott’s 70-slide barrage, Wemmer sounds like he has been assigned the good guy role in a good cop, bad cop strategy.
Elliott’s efforts bore fruit: NN, led by David Knibbe, is dropping its initial resistance and dipping into somewhat riskier investments, which should lift free cash flow. The insurer last month promised to keep raising its dividend yearly.
The concession paves the way for the kerfuffle to calm down – and what of Wemmer? In Switzerland, he is touted as a candidate to preside either UBS or Credit Suisse, where both banks are seeking a new chairman.
At Credit Suisse, Chairman Urs Rohner is in the twilight of his a ten-year tenure overseeing the Swiss bank – a stay beyond April of next year would likely reignite a power play with the bank’s biggest shareholder. At UBS, Axel Weber is scheduled to hand over the reins in the boardroom by 2022.
UBS’ succession search could be complicated by the bank’s domestic head, Axel Lehmann. The Swiss banker and insurance executive knows Wemmer: the duo worked side-by-side at Zurich Insurance as top finance and risk executives.
Like Wemmer, the 60-year-old Lehmann was also passed over for the CEO role at Zurich. A further small-world quirk: incoming UBS boss Ralph Hamers was responsible for NN in its current form. It was the Dutch banker’s decision to spin off the former Nationale-Nederlanden in 2014, severing ties entirely four years ago.
