We’ll let you know if they have any vacancies.
WSJ: Every day, retired florist Rita Wunderle prays for the souls of bankers.
Despite daily headlines about banker-fuelled economic crisis and an alleged $50 billion Ponzi scheme, her 145 neighbours pray, too.
Mrs. Wunderle lives in the Fuggerei, a Roman Catholic housing settlement for the poor that Jakob Fugger “The Rich” built in this southern German city nearly 500 years ago. Praying for Mr. Fugger and his descendants to enter the Pearly Gates is a condition for living here, at an annual rent of 1 Rhein guilder, the same as in 1520. In today’s money, that’s 88 euro cents, or about $1.23.
…The Fuggers still own several castles and other businesses, including a residual stake in a small private bank that carries the family name. But they aren’t nearly as rich as they once were. After reaching its zenith in the mid-16th century, the Fugger banking empire was undermined by wars and the repeated bankruptcies of the Spanish state.
…The charitable trust, however, has been careful in its investments. Most revenue for the upkeep of the Fuggerei comes from old forestry holdings, which became a staple investment for the Fuggers in the late 17th century after they got burned on higher-yielding but riskier financing ventures.
Over the past 200 years, the trust’s annual returns after inflation have ranged from 2% in a good year to 0.5% in a bad year, estimates Wolf-Dietrich Graf von Hundt, the administrator. The trust also has a few local real-estate holdings but no exposure to U.S. subprime mortgages, Icelandic savings accounts or New York investment funds that have undone other charities.
Renovations are slow. Some apartments still don’t have central heating or showers. But there was enough money to repair the Fuggerei after marauding Swedish troops and their horses took up temporary residence in the 17th century, and after Allied bombing raids damaged most of the buildings in World War II.
The lesson isn’t lost on Alexander Fugger-Babenhausen, a descendant of Jakob the Rich. He expects soon to replace his father — Prince Hubertus Fugger-Babenhausen — on the Fuggerei trust’s board. The 27-year-old Harvard graduate recently returned to Augsburg after stints in London with Morgan Stanley and private-equity firm TPG. He says he lost a small bundle on Washington Mutual shares along the way.
The recent financial meltdown has been “a good reality check,” says the younger Mr. Fugger-Babenhausen, over buttered pretzels at his family’s hilltop castle, itself burned and pillaged over the centuries. “I’m not thinking I can reinvent the wheel.”
Image via the Fugger site.
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