Munich - Even in the historic centre of Munich, the Palais Preysing
stands out: Sitting just opposite the Bavarian royal palace, the 289-year-old
baroque confection practically drips with ornate stucco decorations.
Beyond its grand entrance, a red carpet leads up a sweeping
staircase resting on the shoulders of intricately carved caryatids. But like
many of its less glamorous neighbours, the building has been divided into
suites for doctors, dentists, and lawyers. And tucked in among the nameplates
is the plaque of a certain “D.A.L.F.A. Munich Office.”
That’s an acronym for the surnames and the private offices of
a quintet of Germany’s most influential corporate kingmakers: Michael Diekmann,
Ann-Kristin Achleitner, Peter Löscher, Joachim Faber, and Paul Achleitner,
Ann-Kristin’s husband.
The office mates hold seats on the supervisory boards of 10
of the 30 members of the benchmark DAX Index and board positions on more than a
half-dozen other companies in Germany and abroad.
The concentration of power is reminiscent of what a
generation ago was called Germany Inc., the network of executives who ran big
companies in the post-war era.
Paul Achleitner, 60, on Thursday stands for re-election as
chairman of the supervisory board of Deutsche Bank AG, Europe’s largest investment
bank.
Löscher, who has been on the board since 2012, is scheduled
to resign that day. Diekmann, 62, was named chairman of Allianz SE, Europe’s
biggest insurer, earlier this month. Faber, 67, heads the supervisory board of
Deutsche Börse AG, the No. 1 operator
of financial exchanges in Europe.
The five say D.A.L.F.A. is simply a convenient place to work
and their relationships and exchanges there are purely personal. While
conference rooms and the kitchen are shared, they all have their own offices and
computer systems to ensure compliance with financial regulations, and they say
matters relating to their board roles are strictly confidential.
“This is a private office of a group of friends,” says
Achleitner, who opened the place five years ago with his wife. “If we were to
meet privately over lunch or dinner, we would be sitting together just the
same.”
In the 1950s and ’60s, Germany’s underdeveloped capital
markets fostered deep financial ties among companies, particularly banks and
insurers such as Deutsche Bank and Allianz. That left oversight largely in the
hands of a small group of executives who sat on multiple supervisory boards.
Allianz shed its biggest stakes in other German companies
around the turn of the century, when a tax reform encouraged divestment of
holdings. Toward the end of that period, Diekmann was named Allianz’s chief
executive officer, where Faber and Paul Achleitner served on the board cementing
the friendships reflected today in the Palais Preysing.
Deep Ties
To ensure private relationships don’t interfere with
business, the layout, computer systems, and security have been closely vetted,
and Paul Achleitner says it’s relatively uncommon that they’re all on site
simultaneously.
“We are aware of the D.A.L.F.A. office partnership in
Munich, and while it has a bit of an unpleasant aftertaste, we would expect
that compliance rules have a high priority and are being followed,” says
Alexander Juschus, general manager for Germany for IVOX Glass Lewis GmbH, a
consultancy that advises institutional investors on proxy votes. Deutsche Bank
and Allianz say they’re comfortable with the confidentiality measures.
The Achleitners have deep ties to Germany’s financial elite.
Both worked as management consultants and now teach business, and Paul played a
key role in dismantling the Germany Inc. relationships as Allianz’s finance
chief and before that as the Goldman Sachs Group Inc. partner in charge of the
bank’s German business.
Read also: SA's #nuclear ambitions scuppered
He played a role in deals such as the initial public
offering of Deutsche Telekom AG and Allianz’s sale of Dresdner Bank AG to
Commerzbank AG. When Paul departed Allianz for Deutsche Bank in 2012, the
Achleitners rented the office, in one of Munich’s most prestigious
neighborhoods. “For a professional job, you need professional facilities,” says
Ann-Kristin, 51.
The place was too big for the Achleitners, so they took in
their friend Faber, a former CEO of Allianz’s asset management unit. “Splitting
the rent with others is efficient, and I have the advantage of knowing exactly
who my neighbours are,” Ann-Kristin says.
Löscher, 59, a friend of Paul’s and a fellow Austrian, had
spent his first nights in Munich at the Achleitners’ home when he was appointed
CEO of Siemens in 2007. When Löscher was ousted in 2013, Achleitner offered him
a spot in the Palais Preysing offices.
Then in 2015, Diekmann moved in upstairs and an internal
staircase was added to link the two floors. “It can be lonely at the top of a
company,” says Diekmann. “Here we meet as normal people and not as board
members.”