René Benko, the self-seller who ran out of credit

He was a giant with feet of clay, a salesman of himself. René Benko (Innsbruck, Austria, 1977) created one of the main real estate groups in Europe, Signa Holding, thanks to his business skills and, above all, to weave an influential network of contacts: most of the staff were dedicated to organize events. Its lack of transparency hid the typical weakness of the sector, high debt that can cause a collapse when rates rise and asset values ​​fall.

On November 8, Benko handed over the chairmanship of the board to restructuring expert Arndt Geiwitz. On the 29th, Signa declared itself insolvent (similar to bankruptcy). With assets valued at 27 billion euros at the end of 2022, the collapse could become the largest real estate crisis in Europe since 2008. JP Morgan estimates its liabilities at 13 billion. Before the catastrophe, Benko’s assets were 5.6 billion euros, according to Forbes.

Signa’s portfolio includes the Chrysler building in New York, the Selfridges department store in London, luxury shopping centers in several cities such as Vienna, and a historic hotel in Venice, among many other properties, spread across Switzerland, northern Italy, the United Kingdom. United States, the United States and Germany, where it owns the country’s best-known department store, KaDeWe (Berlin).

In 2013, an Austrian court convicted Benko of bribing then-Croatian Prime Minister Ivo Sanader to intervene with his Italian counterpart, Silvio Berlusconi, to void a Signa tax bill in Milan. The businessman left his executive positions, but continued to control the capital: his family trust owns two-thirds of the company.

Father of five children, one with his first wife (whom he divorced in 2005) and four with his second, former model Nathalie Sterchele, he gave few interviews; and since Signa is not listed, he published only certain corporate data, something that had generated harsh criticism from Bloomberg, among others. He liked to surround himself with business personalities, who entrusted him with large sums of money. He boasted of getting up at four-thirty in the morning and working until midnight.

The son of a municipal official and a kindergarten teacher, he has a sister four years younger: he claims that his connection with all three is very strong. They lived in a 60 square meter apartment. From very early on he felt a predilection for luxury; At the age of 17 he acquired his first experience in real estate, in a construction company owned by an acquaintance. He organized the renovation of penthouses in privileged locations, and bragged about the money he earned, showing off his gold chains and a rented Ferrari.

Now he was displaying his €40 million yacht (which he briefly put up for sale in November, and which is now for rent), and his corporate plane and helicopter. The bankruptcy administrator has fired the company’s party planners, receptionists, airplane staff and hunters (sic), who made up the bulk of the workforce: 36 out of 43. He said he wanted his holding company to be compared to that of the Agnelli and other great European families.

He missed classes so much that they did not give him a high school diploma, although he trained as an intern at a financial services company. After founding the Immofina holding company in 1999, he met gas station heir Karl Kovarik, who invested 25 million. Benko had already become a millionaire with the purchase and sale of the luxury hotel-clinic Lanserhof, in the Alps. In Vienna, he built practice centers for doctors, and bought and renovated the Kaufhaus Tyrol shopping center in Innsbruck. In 2006, Immofina was renamed Signa, and expanded throughout Europe. He invested in the retail sector, and bought two Austrian newspapers. In 2019, together with RFR Holding (USA), he acquired the Chrysler building for $150 million.

The drop in customers caused by the pandemic caused its German shopping center chain Galeria, which had received 700 million in public bailout, to go bankrupt. The insolvency resulted in a write-off of 2,000 million in debt, while Signa laid off 4,000 employees, and continued to expand its portfolio. In Austria, its furniture chain Kika Leiner received several million from the State, while applying ERTE at the expense of the treasury.

Dozens of banks, insurance companies and pension funds have been left hanging on to their bonds and credits: the Swiss bank Julius Baer has an exposure of more than 600 million Swiss francs (635 million euros), and Austrian and German entities are equally affected.

Among his friends and investment partners are the Peugeot family; the founder of the construction company Strabag, Hans-Peter Haselsteiner; former pilot Niki Lauda; the founder of casino and gaming technology firm Novomatic, Johann Graf; and consultant Roland Berger. And politicians from the main parties, among them the now former chancellors Alfred Gusenbauer (social democrat) and Sebastian Kurz (conservative), whom he accompanied on his official trips to Russia or the Middle East. Now Benko will check if they were true friendships.

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