The waitlist at Geneva’s Michelin two-star restaurant Domaine de Chateauvieux evaporated after Bernard Madoff’s December 11 arrest, along with about 10 billion Swiss francs ($8.5 billion) the city’s banks and funds had invested with him.
Bankers cancelled six-month-old reservations for holiday parties of a dozen or more, said restaurant manager Esteban Valle. Sales of 5,900-franc aluminum-titanium Zai Spada skis have slumped, and a decline in landings by private jetliners at Geneva International Airport accelerated last month.
“Madoff has been like a cold shower for Swiss wealth managers,” said Sebastian Dovey, managing partner at private bank and wealth consultant Scorpio Partnership Ltd in London.
Madoff’s alleged fraud hit Geneva particularly hard, after at least eight firms placed money with him. Many of their investments were made through so-called funds of funds, pioneered by the city’s bankers to pool client money and invest in multiple hedge funds run by outside managers.
Nestled between the Alps and Jura mountains at the tip of western Europe’s largest lake, Geneva has 140 private banks and 600 independent asset managers.
The financial industry employs 34,400 people in a city of fewer than 200,000 and accounts for 58 per cent of local professional taxes.
