René Benko

"The KaDeWe in Berlin is getting a new owner just before Christmas. The Austrian real estate investor René Benko pays a total of more than 1.1 billion euros for the luxury department store and 16 other department stores rented to Karstadt. According to media reports, Benko's company Signa is paying 500 million euros for the KaDeWe alone. The seller is the landlord consortium Highstreet Holding in London. Nicolas Berggruen, the owner of Karstadt, will continue to operate the KaDeWe, but he now has to negotiate a new rent with the new owner."

"Behind Signa is a daredevil par excellence, the Tyrolean René Benko. In the ranking of the 100 richest people in Austria, he has already moved up to one of the middle positions, his fortune is estimated at 300 to 400 million euros."

"René Benko created something great and then destroyed much of it. Solid business operations and trust in the solidity of the real estate business were left by the wayside. Even though the business and legal processing will take years and it is likely that Benko will have to face court, he did not build the castle in the air called Signa alone. He readily found financiers, including wealthy private individuals, bank managers and insurance people, foundation managers, and Arab sheikhs. Benko invited them to his yacht "Roma" or his estate high above Lake Garda, or he quickly flew to Dubai or Abu Dhabi, to Hamburg or Vienna on his private plane. And all the economic experts willingly gave him capital, apparently without really examining his business model. Just as auditors and real estate appraisers played their roles in the illusion theater of the Austrian entrepreneur. The lawmakers in Germany and Austria, who left gaps through which the clever newcomer slipped, also bear some of the blame."

"René Benko created something great and then destroyed much of it. Solid business operations and trust in the solidity of the real estate business were left by the wayside. Even though the business and legal processing will take years and it is likely that Benko will have to face court, he did not build the castle in the air called Signa alone. He readily found financiers, including wealthy private individuals, bank managers and insurance people, foundation managers, and Arab sheikhs. Benko invited them to his yacht "Roma" or his estate high above Lake Garda, or he quickly flew to Dubai or Abu Dhabi, to Hamburg or Vienna on his private plane. And all the economic experts willingly gave him capital, apparently without really examining his business model. Just as auditors and real estate appraisers played their roles in the illusion theater of the Austrian entrepreneur. The lawmakers in Germany and Austria, who left gaps through which the clever newcomer slipped, also bear some of the blame."

"René Benko created something great and then destroyed much of it."

"In the year 2013, René Benko and Roland Berger take a seat at one of the white-laid tables. They dine on upscale bourgeois food at Borchardt, a whole plate-filling Wiener Schnitzel being one of the most popular dishes. Occasionally, one of the other guests comes to the table around lunchtime and greets Berger, who then introduces the young man and successful entrepreneur by his side. Just then, Benko's Signa had entered the department store chain Karstadt and would soon take over all shares from the failed US entrepreneur Nicolas Berggruen. Thus, Benko suddenly becomes a highly relevant real estate investor in German city centers."

"People are eating out of Benko's hand, and the billionaires are feeding him fresh money. His narrative of Signa as the real estate company, which, thanks to the entrepreneurial genius of its founder, is better than all the others, fits perfectly with his clientele. One of his early fans, the entrepreneur Torsten Toeller, recounts Benko's strengths today with which he could dazzle: "I overestimated the energy and strategic understanding of a young supposed exceptional entrepreneur for too long and didn't recognize the story behind the story that René Benko has always told so eloquently.""

"René Benko and his guests, wherever they idly floated, sought and found something that French sociologist Grégory Salle calls “demonstrative seclusion.” Using a superyacht, and especially owning one, is “one of the most obvious, most important external signs of wealth,” writes Salle in his widely read study on superyachts. For the critic of capitalism, it is also a synonym for the aloofness of the wealthy economic elites: it represents a spatial retreat on a small scale, which implements a societal detachment on a large scale."

""René Benko effortlessly meets all the points of the dark triad," Thomas Knecht certifies in a remote diagnosis. He was a forensic psychiatrist at the Psychiatric Center in Herisau, Switzerland, until mid-2023 and was a much sought-after expert in numerous trials. In the luxury life, Knecht sees the narcissism, in Benko's talent for winning people over for his ideas, the Machiavellianism. In addition, there is a certain ruthlessness in dealing with other people, at least when they were business partners."

"The company founder proved once again to be a skilled opinion maker – behind the scenes, but also in front of them. Thus, Benko regularly claimed to journalists, often unchallenged, that Signa operated with a high equity ratio of almost 50 percent. That was not entirely wrong, but nevertheless anything but right. Because, like other real estate conglomerates, Signa included financing with hybrid capital - namely mezzanine such as profit participation certificates; both are counted as equity on the balance sheet but come from external creditors. Therefore, the 20 to 30 percent of the capital actually provided by the shareholders was all the more important. But even this genuine equity capital, as it turned out at the latest after the bankruptcy at the end of 2023, was not really safe. For Benko had granted numerous investors the right to return their shares and be paid out at the then current rate. Roland Berger, Torsten Toeller, but also Swiss Lindt & Sprüngli Chairman of the Board Ernst Tanner and German logistics entrepreneur Klaus-Michael Kühne all had written agreements that could compel either René Benko's private foundation or parts of Signa to buy back their shares. And they were probably by far not the only ones."

"Together with the head of her family office, she hosts a video conference with a small circle of managers and investors who gather whenever concrete superlatives beckon. The most important, René Benko, is connected from Austria. He wants to convince Alannah of himself and his business partner Tos Chirathivat, who has sent a representative. With a member of one of the economically most powerful family clans in Thailand, he already manages several luxury department stores like KaDeWe in Berlin or Alsterhaus in Hamburg: huge cathedrals for brand believers whose religions are named Gucci, Prada, or Saint Laurent. Although he is not the bidder with the highest offer, Benko tells Ms. Weston, but he is the one with the best intentions. His strategy: best owner instead of best bidder."

"The spectacular growth of the real estate division Prime, which according to an investor document had doubled the value of its property portfolio to 11.5 billion euros within just two and a half years, thus carried high risks. When financial experts internally pointed out the dangers to René Benko, he liked to dismiss the doubters with the phrase "I am an entrepreneur, not an abstainer." However, the risks must have been well known to the founder and financial wizard. Apparently, he consciously took these risks in order to continue growing rapidly."

"The general assessments of the real estate sector's situation are, of course, known to the Single Supervisory Mechanism. However, at a meeting of the body towards the end of 2022, there was also specific discussion about René Benko's Signa. The rapid growth of the group, the company's lack of transparency, and critical media reports prompted the banking supervision to take a very unusual step. It was decided to ask banks in the eurozone exactly how many loans they had issued to Signa, how well they were secured, and whether they could absorb a potential default of payments. Usually, the ECB and BaFin do not inquire about lending to a specific company, but rather they ask more generally. It would have been appropriate to review the burden of lending to the entire real estate sector, especially since there were and are other shaky candidates. But evidently, the SSM wanted to send a clear warning signal and put a big question mark behind Signa's creditworthiness. Because with their inquiry, the supervisory authorities must have been aware that it would halt the flow of credit to Signa, which it desperately needed. No bank can afford to upset the regulators. Officially, the ECB does not comment on this, supposedly due to confidentiality obligations. In response to a query from a member of the Bundestag in November 2023, the then-chairman of the ECB's Supervisory Board, Andrea Enria, only generally indicated that since 2018, there had been several audits concerning credit risks in the commercial real estate sector. This was part of "a more comprehensive set of measures in relation to vulnerable sectors, including the real estate sector." Obviously, the review of the Signa loans was more than just one of many. Once the ECB had received the results of their survey, it decided to take a second step: it pushed several banks to either partly write off loans to Signa or to make additional provisions for potential losses. This was reported by the news agency Bloomberg in the summer of 2023. The very specific signal that Lagarde, Enria, his colleagues, and his female colleagues sent was clearly received. Since the beginning of 2023, Benko could hardly obtain new bank loans – which is devastating for any real estate company because nobody builds with equity alone. In relation to the public and his shareholders, Benko kept quiet about the bank blockade initially. Outwardly, business continued as usual. The facade of all the buildings in "irrecoverable locations" (quote Benko) was still standing, and the company continued to build – albeit on sand."

"René Benko, on the other hand, acts as if Signa were impregnable. As if neither the misery of interest nor the Covid pandemic could touch it. Instead, he spreads, internally and externally, the narrative that Signa will emerge from the crisis stronger. Because while competitors were plummeting, they themselves were protected thanks to long-term financing and an allegedly high level of equity. Even in December 2022, Benko promises his employees at the "Signa Days" in a luxury hotel in Tyrol that they will now grow even faster. Signa would reach its 2030 goals already by 2027, despite and because of the real estate crisis. His employees celebrate Benko for his words. The party, which they also benefited from due to high salaries, bonuses, and value increases of employee shares, is supposed to continue despite the turn in interest rates. Everyone wants to keep making money: the employees, the consultants and lawyers who earned six- to seven-figure sums annually; the shareholders who had previously profited from hefty dividends, as well as the well to spectacularly paid managing directors of the individual Signa divisions. And of course, the founder himself, René Benko, who set the direction for the group even without office."

"Although dissatisfaction was slowly spreading among the shareholders, René Benko usually managed to impose his will on them. His specific mix of persuasion, flattery, and begging worked well in the individual divisions like Prime, but also in the holding company, where important shareholders such as Ernst Tanner, Hans Peter Haselsteiner, or Torsten Toeller were invested. This had the advantage for them that their interests were identical to those of René Benko. Because he also held shares in the holding through his private foundation. However, there were at least two disadvantages that the holding investors accepted: Firstly, unlike Benko, they could not independently meddle in the other divisions. And secondly, the holding almost had no assets of its own, only shares in the individual divisions. When there was nothing left to take, the flow of money to the holding dried up. And only costs and debts remained. Therefore, a consolidated balance sheet would have been even more important for the holding shareholders, that is, an overview of the actual financial situation of the entire structure after deducting all intergroup mutual shareholdings, receivables and debts, deliveries and services. However, despite several attempts by shareholders, Benko had never provided this, so that only he and some managers, like the CFO Manuel Pirolt, had a really deep insight."

"Klaus-Michael Kühne led the forwarding company Kühne & Nagel to global recognition. He holds large stakes in the Hamburg shipping company Hapag-Lloyd and the German airline Lufthansa. Thus, he has become the richest man in Germany. However, two investments have only brought him losses, both financially and emotionally. His hometown club, Hamburger Sportverein (HSV), just won't manage to get promoted to the 1st Bundesliga, despite several injections of funds from Kühne over the past years. And then there is René Benko's Signa, in which he has invested even more. More than 500 million Euros from his family foundation are tied up in the company, as he spoke to two editors of manager magazin at the beginning of the year 2023."

"Torsten Toeller has traveled there, as well as other shareholders such as the Swiss coffee machine millionaire Arthur Eugster and Ernst Tanner, Chairman of the Board of Lindt & Sprüngli, who either attend themselves or are represented by family members, and the Arduini Clan, a Brazilian-Italian entrepreneur family that has mainly made their wealth with cement. The Austrian construction entrepreneur Hans Peter Haselsteiner (Strabag), who holds 10 percent of the holding, has sent his apologies. The shareholders want to know if René Benko and his Signa will survive the real estate crisis that is currently rolling towards Europe."

"The letter that major developers found in their mail at the beginning of March 2024 does not skimp on superlatives. The offered construction project is described as a "once in a lifetime Development", furthermore "the crowning glory of Hafencity", "245 meters of passion". On 14 glossy pages of the "Investment Teaser", leading real estate broker CBRE delves deeply into the metaphor drawer of his profession. Small hitch: The project in question is the Elbtower, which – as the eloquent brokers correctly claim – urgently needs a "Restart". Instead of offering an "amazing view", the building's skeleton on the edge of Hamburg's Hafencity presents a pitiful sight. The construction site has been as dead as a deserted cemetery since spring 2024 and has been at a standstill since October last year; in January, the project company Elbtower Immobilien GmbH & Co. KG, which belongs to René Benko's Signa Group, filed for bankruptcy."

"Nevertheless, René Benko gave the impression at a Signa employee event at the end of 2022 that Signa could emerge as a winner from the real estate crisis. There is no such thing as the real estate market, there are real estate properties and there are very good real estate properties. The latter belong to Signa."

"Acquaintances had advised them to shift the family's focus abroad, to protect the children. They were to gain distance from the drama unfolding at home: Signa's bankruptcy and René Benko's deep personal decline from a star entrepreneur and Austria's richest man to a loser."

"What did not change: Benko wanted to continue making both small and large decisions. When he went on trips, he filled his pockets with countless printouts to work through on the plane or in the car. It could take weeks before he engaged with them and made a decision. Until then, nothing happened. Thus, Benko, who had always spoken of quick decision-making paths, unintentionally slowed down the pace of Signa. His unwillingness to give the company an organization that would have been appropriate for its size also had fatal effects. A long-time leading expert at Signa, the finance and trade expert Wolfram Keil, summarizes: "René Benko had completely tailored the company to himself and did not change that even when Signa had grown significantly and became a conglomerate. Almost all important decisions had to be made by him. Thus, he became a bottleneck for the entire organization.""