SBM – capital flight triggers another all-time high

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In early July, I'll spend a few days in Monaco.

Ahead of the trip, I looked into the latest hospitality and entertainment offerings in the Principality. The place is visibly going from strength to strength.

The same applies to SBM, the company that owns a large chunk of Monaco's prime real estate.

Even though real estate stocks remain broadly unpopular, SBM's share price has just reached yet another all-time high.

It's time to revisit a stock that truly is an oldie but goldie.

Société des Bains de Mer et du Cercle des Etrangers à Monaco S.A.

Profiting from the wealthy's search for safety

Tax havens, Plan B jurisdictions, and asset shelters have become mainstream topics.

How do you profit from this trend as an investor?

As a long-time advocate of such jurisdictions, I explored exactly that question in a 2021 series titled "The great escape". The three articles looked at investment opportunities not just in Monaco, but also in Dubai and Guernsey.

At the time, Dubai real estate was deeply out of favour. I highlighted Emaar Properties (ISIN AEE000301011, AE:EMAAR), the country's leading real estate developer. Despite its globally recognised projects, the stock traded at an astonishing 70% (!) discount to net asset value. It subsequently delivered a 4x return and, despite the Iran War, still remains up 3x today. As ever, the best opportunities emerge when everyone is holding their nose.

The Guernsey article pointed readers towards The International Stock Exchange (ISIN GG00BYYLRY96, "TISE" – now delisted). Rather than property, this was effectively a monopolistic digital platform trading at a p/e of just 5 despite strong growth plans. The stock was later taken out at a 3x return following an all-cash acquisition by an American investment firm.

For Monaco, the obvious candidate was Paris-listed Société des Bains de Mer et du Cercle des Etrangers à Monaco S.A. (ISIN MC0000031187, FR:BAIN). "SBM", as the company is universally known, is effectively the publicly listed holding company of Monaco's ruling Grimaldi family, which owns 64.21% of the share capital. Prince Albert II, Monaco's reigning monarch, ultimately sits at the centre of the structure.

SBM owns many of Monaco's trophy assets, including Hôtel de Paris Monte-Carlo, Hôtel Hermitage Monte-Carlo, Café de Paris Monte-Carlo, Monte-Carlo Bay Hotel & Resort, and the newly developed One Monte-Carlo residential district. It also owns additional real estate in nearby France, including Monte-Carlo Beach and Villa La Vigie. SBM further enjoys the exclusive right to operate casinos in Monte Carlo under a licence agreement with the Monegasque government.

Back in 2004, I had published an investigative report into SBM's extraordinary balance sheet. The report went viral and remains one of the most requested pieces I have ever written. In 2019, I even published an updated version for free because readers kept asking for it.

Most recently, the stock has pushed to yet another record high.

Société des Bains de Mer et du Cercle des Etrangers à Monaco S.A.

It all begs the question….

Where does SBM go from here?

Monaco has a truly unique history and global brand. Many people will visit the Principality at least once in their lifetime. That alone makes SBM an unusually interesting company to follow.

There are also the constant twists and turns in Monaco's (and SBM's) development story. When I first wrote about SBM in 2004, investors were excited about the prospect of further land reclamation projects boosting the Principality's fortunes. Since then, that vision has become reality through developments such as Mareterra.

Today, it's the resurgent interest in Monaco as a true – and possibly, the ultimate – safe haven for the world's wealthy. For years, Dubai had seemingly taken over that role. Given developments in the Middle East, however, the future of Dubai is now being debated more controversially, with passionate arguments on either side. More than one Dubai resident is said to have escaped to the peace and quiet of Monaco.

If you wanted to get yourself up to speed on this trend, watch the 16-minute video recently published by Andrew Henderson, discussing the ins and outs of moving to Monaco: "Dubai It's Over, Here's Where You Should Go Instead". Henderson is the founder of Nomad Capitalist, a firm that helps wealthy and entrepreneurial people with Plan B residencies, alternative citizenships, international investing, and similar matters. (Incidentally, I'll be speaking at the firm's annual conference in Cancun from 4-7 November 2026 – check the event website for details and ticket prices.)

Source: Nomad Capitalist (website, conference, video).

Think of Dubai what you will, but interest in Monaco is clearly surging again.

Some of it is making headlines. Ukraine's richest man, Rinat Akhmetov, recently closed what was reportedly the most expensive apartment deal in history, spending EUR 471m (USD 554m) on a 21-room apartment spread across five floors in Mareterra's Le Renzo building. The implied valuation of EUR 188,000 per square metre is eye-watering even by Monaco standards. Average prices in the Principality are closer to EUR 60,000 per square metre, while even prime properties around Casino Square would normally fetch "only" EUR 100,000-120,000.

Another notable trend is the growing number of families choosing Monaco as a permanent home. In the past, the Principality was famous for single men renting the tiniest possible studio apartments simply to establish residency and benefit from Monaco's tax regime. More recently, regulatory changes have driven some of that business away, while demand for larger family properties has increased significantly instead. The Monaco Tribune described this shift well in a 12 May 2026 article titled "The new Monaco buyer: family living, education and the evolution of prime property

What has changed over the past decade is not the Principality's appeal, but the number of people choosing to settle in and raise families.

Max Dekkers, director of Dameno Monaco Real Estate, has observed that evolution across two generations of Monaco's school system. Born and raised in the Principality, he now has three children attending school here themselves. Having experienced Monaco both as a student and now as a parent and real estate professional, he has seen how the market and wider infrastructure have adapted to a more international, family-oriented resident base. 

'The quality of life was already exceptional when I grew up here,' he explains. 'What has evolved significantly is the infrastructure supporting family life and international education.'

That evolution is increasingly visible across the Principality. More buyers and tenants are relocating to Monaco full-time with children, and the government has invested consistently in the infrastructure needed to support that shift, particularly in education.

The structure of Monaco's property market has evolved alongside this demand. Newer developments such as Bay House, Tour Odéon and the residences within Mareterra are notably different in composition from many older buildings in the Principality. Apartments are larger, with fewer units per building, greater privacy and layouts designed for long-term family living. At the same time, Monaco’s existing residential stock has adapted. Over the past decade, many investors and owners have combined smaller apartments into larger residences better suited to full-time family life. In practice, the demand shaped the supply. Developers, architects and owners responded to what clients increasingly sought from Monaco."

Monaco as a place where you not only save taxes, but also maximise your children's future prospects – who would have thought? Presumably, these Monaco schools wouldn't teach seven-year olds that they can cut off their private parts, which further adds to its attraction.

As ever, there is one company that benefits disproportionately from everything happening in the Principality: SBM. The group owns not just hotels, casinos, and commercial buildings, but also a substantial amount of residential real estate. Almost every positive development in Monaco somehow feeds through into SBM's asset base. Operationally, the company is not exceptionally profitable. But the value of its underlying portfolio keeps marching from record to record.

Does the share price still have further to run?

Quite probably, yes.

Prime Monaco assets at a discount

One of the most detailed analyses of SBM's asset value was published in 2023 by my friend Andrew Brown of East72, an Australian investment firm specialising in dynastic family businesses. Even back then, his analysis concluded that SBM stock was probably worth at least EUR 150 per share based on the value of its unique portfolio of real estate and operating assets.

Three years later, the stock is approaching that level. However, the company's net asset value will also have increased further since then.

When I first wrote about SBM in 2004, the stock traded at EUR 18 – below its net cash reserves. Investors effectively got Monaco's trophy real estate portfolio for free. SBM has been a slow burner ever since. The stock also endured long periods of going nowhere. Still, it is probably safe to assume that five, ten and twenty years from now, the share price is more likely to be higher rather than lower. That is partly due to Monaco's relentless optimisation of scarce space, a process in which SBM will almost certainly continue to play a central role.

There is almost no conventional analyst coverage of the company. Instead, the shareholder base increasingly consists of wealthy long-term holders quietly squirreling away stock.

One such investor is Aaron (or Ahron) Frenkel, the Israeli businessman and philanthropist who lives in Monaco and heads the Principality's Jewish community. He first disclosed a 5% stake before later increasing it to 7%, and most recently 8%.

Europe's on-and-off richest man, Bernard Arnault, is also invested. Through LVMH (ISIN FR0000121014, FR:LVMH), the Arnault family owns a 5% stake. LVMH has retail outlets on SBM's estate, so the stake has some strategic value for both sides.

Another longstanding shareholder is Galaxy Entertainment (ISIN HK0027032686, HK:27), the Macau gaming group, with a further 5% stake. This dates back to a period when SBM sought to expand its "Casino Monte-Carlo" brand into the Chinese gambling market – something I will actually be check out firsthand next month while spending two weeks in Hong Kong.

That leaves only around 22% of SBM's 24,516,661 shares in free float. The company's market cap is currently EUR 3.3bn, i.e. there is enough free float for private investors and even small funds to slip in and out.

Given its glamour and seemingly endless economic success, SBM increasingly attracts long-term investors who want exposure not just to the underlying assets, but also to Monaco's prestige and heritage. I wouldn't be surprised if the supply of shares gradually becomes scarcer over time simply because a certain type of shareholder keeps locking stock away for the long term.

If you have any doubts – or are simply curious – you can always test the product yourself. As ever, Monaco is worth a visit. The costs may be eye-watering, but true uniqueness rarely comes cheap.

I'll make my own (small) contributions to SBM's revenues when I return to the Principality in a few weeks. Despite having visited many times before, I remain just as excited about going back. Monaco is the mother of all tax havens, and it simply never loses its lustre.

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