Markus Matuszek of M17 Capital Management presented his thesis on VZ Holding (Switzerland: VZN) at European Investing Summit 2024.
Two Years On: Premium members, scroll down for an automated review of how this thesis played out from November 2024 to October 2026.
Thesis summary:
VZ Holding is a Swiss financial advisory group, founded in 1993 as VZ Versicherungszentrum by McKinsey alums to compare individuals’ insurance coverage and propose better, often cheaper products, paid by an intro commission from the insurer. Renamed VZ Holding four years later, it now offers retirement, pension, tax, succession and real estate planning, asset management and banking. Markus calls it “a boring yet steady compounder”: about 1,400 employees and a net profit margin above 36%.
VZ targets clearly defined segments: homeowners aged 50 and over, managers and entrepreneurs, with Swiss clients Markus describes as inert, slow to switch without big savings. He sees a two-part moat. Repetitive customer behavior: providers pay most commissions, so clients see nearly the full benefit and add further “platforms.” A cost-of-delivery advantage: acquisition costs spread across platforms, and switching grows less likely. He estimates over 75% of incremental revenue reaches the bottom line, roughly twice the group margin.
Revenues and net profit have grown every year since founding, through the 2008 financial crisis and COVID-19; trailing sales exceed CHF 550m and net profit CHF 200m. The share of wealth management clients using three or more platforms rose from 23% in mid-2022 to 26% in mid-2024, against a long-term target of 33%. Germany (2000) and the UK (2021) widen the market, and political uncertainty over pensions, taxes and inheritance in all three countries brings in new clients.
Founders, management and employees own over 68%; Capital Group is the only other holder above 3%. Markus sees little to change: IT investment is done, the bank is well capitalized, and the UK build-out is the main capital need. The dividend has grown at an 18% CAGR over five years, with the payout ratio heading toward 50%. He prefers buybacks to acquisitions in unfamiliar markets, though insider concentration and about 1.5% in treasury shares limit both buybacks and share incentive plans.
At CHF 143 (October 25, 2024), a CHF 5.6bn market cap, the shares were up over 60% in a year. Markus’s CHF 230 target, near the low end of a CHF 226-284 valuation range, implies about 60% upside within three years plus a 2.1% yield, on expected 2027 diluted EPS of CHF 8.4 (CHF 5.1 TTM). With a 0.55 beta, he suggests a partial position, added on weakness. Risks: provider consolidation (Credit Suisse/UBS), a single-insurer model, and fintechs like Revolut that pay no intro commissions.
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European Investing Summit 2024 was held from October 29 to 31, 2024. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
