Swiss Thetaz Aims at Tour de France With Contrarian IAM Cycling
On a damp morning in mid-January, Michel Thetaz’s shaved legs churned the pedals of his Scott Sports carbon fiber bike down a Majorca road. The Swiss millionaire was at the Spanish vacation destination for a three-day business trip.
Thetaz, the 62-year-old chief executive officer of Geneva-based Independent Asset Management SA, had arrived in a private jet and was now riding along with his recent $13 million investment -- a professional cycling team.
His funding of IAM Cycling has already paid off, Thetaz says, as the squad received one of four wild-card invitations for July’s Tour de France. A spot in cycling’s most well-known stage race will allow Thetaz to market his 19-year-old closely held financial services firm to potential individual investors across Europe, he said.
“We had to make our product known to the public and that’s where the cycling idea came from,” Thetaz said in a telephone interview. “We are very contrarian. The banks in Switzerland -- our competitors -- would never go into cycling. They go for golf or yachting. We are different. We have already delivered more than what people were expecting.”
IAM was founded by Thetaz in 1995 and currently has seven funds with 7 billion Swiss francs ($8 billion) under management.
There’s also an individual motivation for Thetaz, a cyclist serious enough to partake in the ritual of shaving his legs, a practice that reduces wind drag and makes massage less painful. He rides about 5,000 kilometers (3,106 miles) each year, and spent 3 1/2 hours on his bike while his team trained on that rainy Friday in Majorca.
“The other reason was emotional,” he said. “I’m a cyclist. This is my favorite sport. For me, it’s a habit, a lifestyle. For us as a company, it was pretty easy to go in this direction.”
Since the team’s founding last year, IAM Cycling has competed as part of Union Cycliste Internationale’s 12-team European Pro Continental circuit, one step below the UCI’s Pro Tour. The Pro Tour features 18 teams, including Team Sky, a squad that featured the 2012 and 2013 Tour de France individual champions. Sky, backed by the U.K.’s biggest pay-television operator British Sky Broadcasting Group Plc (BSY), News Corp., had a payroll of $25.1 million (15.4 million pounds) in 2012. Thetaz’s $13 million payroll makes IAM the highest-spending squad on the second-tier circuit.
Along with an invitation to the Tour de France, cycling’s oldest stage race, IAM also received a wild-card berth for this week’s Paris-Nice race. The eight-stage race was first held in 1933 and is run by Amaury Sport Organisation, which runs the Tour de France. IAM rider Aleksejs Saramotins was part of a two-man breakaway in the race’s second stage, maximizing television exposure for Thetaz’s firm until being caught near the finish. The race ends March 16.
This winter, the team has seen promising results as it prepared for its Paris-Nice debut. Swiss-born IAM rider Johann Tschopp finished 9th at the Tour of Oman last month, 1 minute, 32 seconds behind race winner Chris Froome, the reigning Tour de France champion of Team Sky, and ahead of Tour veterans Vincenzo Nibali and Frank Schleck. IAM finished second in the 6-stage Oman race, 2 minutes, 30 seconds behind Team Sky.
Mathias Frank, a 27-year-old Swiss climbing specialist, joined Thetaz’s IAM squad this year and will be the team’s main contender at the Tour de France, where the course’s mountain stages favor riders skilled at ascending and descending the steep passes. Frank, who was left off of BMC Racing’s 2013 Tour de France squad, said Thetaz’s financial background and attention to detail made the move to a smaller team easier.
“Swiss precision would be a good word to sum up this team,” Frank said in an interview at the team’s hotel in Majorca. “We get everything we need. IAM is a smaller, more low-profile team than BMC, but it’s hard to tell the difference in the level of organization.”
While Frank is the team’s top Tour de France hopeful, the addition of Sylvain Chavanel is probably the primary reason for the squad’s inclusion in the Tour’s lineup from July 5-27. The Frenchman has started the Tour every year since 2001, has three career stage victories and posted two top-10 stage finishes last year.
“The public loves him,” Thetaz said. “It’s giving much more attention to the team.”
In the second year of a three-year sponsorship agreement, Thetaz said he would consider taking on a co-sponsor for 2016 to help offset costs. However, he doesn’t want to overshadow his firm’s name.
“You can have a big impact if you are the only one on the jersey,” Thetaz said. However, adding a co-sponsor “would give us the possibility to play with the major teams in the world.”
A Tour de France berth will account for about 95% of IAM’s television exposure for the season, according to a 2013 sponsorship report by Cyclingnews and Stamford, Connecticut-based sports consultancy Repucom America LLC. In return, winning one of the Tour’s 21 stages, could produce as much as $9.9 million worth of TV, print and online media exposure for IAM. Team Sky’s 2013 Tour victory generated about $550 million worth of advertising value to its sponsor, according to the report.
In it’s second year of existence, Thetaz’s cycling team has joined the peloton on the sport’s biggest stage. The rise appears to be counter to Thetaz’s money management strategy of slow, consistent investment growth.
“We hate hedge funds,” said Thetaz, who cites Warren Buffett’s approach to investing as a guiding principle.
“We look for predictability,” he said. “And we only invest in something we understand. When there are so many companies around the world to invest in, you don’t have to invest in one you don’t understand.”
Thetaz’s financial success might also help him attract higher-priced riders in the future, such as Switzerland’s Fabian Cancellara, a four-time World Time Trial champion who has won the opening stage of the Tour de France five times. Cancellara, 33, turned down an offer from IAM last year to remain with a team sponsored by U.S.-based Trek Bicycle Corp. Cancellara’s salary is about $4.5 million a year, Swiss newspaper Blick reported in July.
“A big rider joining a smaller team is a tough challenge,” Thetaz said. “It’s a bit too early for us to solve that.”
Team ownership hasn’t been without its pain for Thetaz. On Feb. 18, IAM rider Kristof Goddaert, a 27-year-old Belgian, was killed when he was hit by a bus while crossing a set of railroad tracks during a training ride, the team said.
The death shook Thetaz, who said he prides himself on managing his company’s funds without emotion.
“We are a small firm,” he said. “It belongs to me 100 percent. The emotion is there when you are with the riders at the races.”
After getting turned down by Cancellara, Thetaz focused on Chavanel. The 34-year-old finished fifth at last year’s Paris-Nice, where he won the points classification and sprinted for a win in the race’s sixth of seven stages. He also finished fourth at the 185-mile Milan-San Remo in Italy, professional cycling’s longest one-day race.
Chavanel was heavily recruited by Thetaz after spending the past five years with Belgium’s Omega Pharma Quick Step team, which also featured sprinter Mark Cavendish, the winner of 25 Tour de France stages, third all-time.
Chavanel said his decision to join IAM over six other teams came after a 2-hour lunch meeting with Thetaz in September at the rider’s home in Poitiers, France.
“Every single one of the other teams spoke to me by phone,” Chavanel, dressed in a black IAM Cycling track suit, said in an interview. “I much prefer human contact to see what people are like. Michel is simple, passionate. We reached an agreement on that day. That was it -- I knew. I was sure of my decision.”
To contact the editors responsible for this story: Michael Sillup at email@example.com Michael Buteau, Jay Beberman