2018-04-16

“We'll take what we can carry
And we'll leave the rest
Big wheels rolling through fields
Where sunlight streams
Meet me in a land of hope and dreams”

Land of Hopes & Dreams – Bruce Springsteen

While Bruce Springsteen “The Boss” was walking “Streets of Philadelphia”, his song from the movie “Philadelphia”, Stéphane Bonvin was walking the streets of Lausanne & Geneva searching for attractive residential properties to acquire. It was 1994, and 27-year old Stéphane Bonvin, the entrepreneurial Boss, was founding Investis Holding (www.investis.com).

The company is now a leading residential property company in the Lake Geneva region and a national real estate services provider active in the 2 synergetic segments of Property Management & Real Estate Services.  Investis’ real estate portofolio market value today, is in excess of CHF 1 bn, almost 90% of which is residential focused on the prosperous lake region of Geneva, with a net annualized property rent of CHF 50 mn and a 3.5% “real” vacancy rate (beware! some of Swiss quoted real estate groups are more “permissive” with the reality of their vacancy rates!).

Starting from scratch as a 20-year old, buying real estate & growing it into a CHF 1 bn real estate group as Stéphane did, shows the skill and determination of a real entrepreneur and the stamina of a “Boss”.

But that’s not enough for a full-blown entrepreneur, with experience & a network acquired over 30 years in a confined region! You need a vision and Stéphane’s vision is that real estate services need to & will change, by moving from paper shuffling to digital. Yes, it has already started, but it is Investis’ intention to pursue this evolution. This explains the growth strategy, the acquisition of Régie du Rhône, of Privera in 2012 to offer real estate services across Switzerland, the investment in Polytech Ventures Holding and, more recently, in Neho (www.neho.ch). Neho’s disruptive mission is quote: “to redefine the real estate brokerage business, offering property owners a modern, extremely cost-effective and attractive alternative to conventional brokerage” and: “Achieving greater efficiency and quality through digitalization is a key element in the Investis Group’s strategy.”

No sign of complacency here!

In my past letters, I have often expressed my doubts, fears & skepticism of buying new equity issues, as I am only too aware of the banksters. But, at the end of June 2016, the Brexit vote affected Mr. Market’s mood. On June 30th, Investis was launched into the Swiss Stock Exchange, without much ado, at a reasonable valuation, and I couldn’t resist starting a position in the Investis Group.  According to my usual valuation method, Investis stock is trading today 15% below its intrinsic value.

A solid real estate portfolio, a 4% dividend yield and a growth strategy! An entrepreneur who delivers! What more could one ask for?

Among other goodies, the IPO allowed the young company to refinance more than CHF 400 mn at rates between 0.25 and 0.75% over the next 2 to 5 years. I certainly much prefer to be an equity owner than a bond holder!