Platform model pays off as crises hit rivals

Universal-Investment’s Bernd Vorbeck describes the German platform advantage.

Investment platforms have been some of the very few beneficiaries of the financial crises since 2007. Many investors have turned to them, looking for either a wider range of funds than one manager can provide, or for
onshore products unable to lock their money away.

They have also sought their help to look for well known service providers for their funds, as well as an independence from banks, which in many cases acted in their own interests during the crisis.

Universal-Investment, founded in 1968 as a joint venture between several private banks, has benefited from all this. Its mutual funds took in net new business of €2.4bn in 2009 – making it one of Germany’s most popular fund
managers, according to figures from Cerulli and Lipper. More than one of every €20 German fund managers took in that year went to Universal. Last year, its net new flows to mutual funds fell to €218.3m, but even this lower number still ranked the Frankfurt-based operation Germany’s eighth most popular mutual fund manager.

Outperformance

Its funds took in money in a year German mutual fund managers suffered €16.1bn net outflows. Universal-Investment today administers to assets of €138bn and has assets under management in its funds of about €11bn.

Bernd Vorbeck, member of the firm’s management board, says investors have appreciated the range of funds on Universal-Investment’s platform – more than
400 at last count, launched together with about 170 partners worldwide – as well as associated services of administration and risk management, and arguably most important, Universal-Investment’s independence.

“Independence, neutrality and no conflicts of interest are what truly sets Universal-Investment apart. They are our key characteristics,” Vorbeck says.

“For this reason, we can truly act, and we are not tied to any house on grounds of our corporate structure. It is clear that, for example, when we speak with investment b outiques or wealth managers, they place great value on the fact we do not have an own active portfolio management, and there is no conflict of interest that we would send business in the direction of one house or another.”

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