UniCredit Private Banking rethinks selection

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Accountability is the reason why Jean-François Hautemulle has made the selection process at UniCredit Private Banking as simple and transparent as possible.

Since the onset of the financial crisis in 2008, the fund selection process has become more rigorous, as bankers and clients ask for more details on selected investment vehicles as well as quick answers when things don’t go as expected, according to Jean-François Hautemulle, head of fund selection at UniCredit Private Banking.

“Fund selection has become more professional,” he says. “Bankers need more information and they expect us to follow up and to be able to give accurate answers very quickly.

“At the end of the day, we can be held accountable if things go wrong.”

For this reason, Hautemulle tells Investment Europe, the UniCredit team looks for straightforward solutions to meet clients’ needs.

The fund selection team at the Italian bank is composed of seven people, with analysts based in three hubs: Milan, Munich and Vienna.

“Our team is truly European in nature and our approach is very collegiate,” Hautemulle says.

“All our evaluations are done by two team members from different regions, and decisions are made taking into consideration the opinions of all the team.

“Everyone has broad exposure to all asset classes, as we tend to assign analyst by asset managers instead of asset classes.”

Guided architecture

The fund selection team spends about 200 hours each month talking to asset managers, finding out what they are developing or introducing to the market.

UniCredit operates a guided architecture model, with 11 preferred partners common to all regions.

“We maintain a pan-European product catalogue of about 160 funds across 23 asset classes, which serve as the base for the regional recommendation lists in Austria, Germany and Italy. Each local team is in charge to find the most appropriate investments for each market,” says the fund selector.

Hautemulle joined the bank as head of fund selection in December 2009. Since his appointment, UniCredit has completed a revision of the selection process, merging the three different fund selection strategies previously carried in the countries according to best practices in each.

In order to better overview the process, Hautemulle recently relocated from Munich to Milan.

According to the manager, fund selection should have a systematic, transparent and independent approach.

“Our approach is systematic and consistent in identifying the funds that offer continuity of performance and the probability to generate superior future returns,” he says.

“Moreover, we follow a transparent, clearly defined and easy to understand selection process, which makes it easier to explain our decisions. Finally, our recommendations must be independent of any internal or external influence, in order to find the most suitable solutions for our clients.”

To find new funds for potential investors, each month the team performs a quantitative screening of all the Morningstar peer groups, which allows the quick identification of new, promising candidates for the bank’s European product catalogue.

“Besides the usual news flows, talking to asset managers gives us a good idea of what they are developing or introducing to the market,” Hautemulle adds.

The fund selection team works closely with the distribution networks, from which it gets regular feedback on which funds or solutions are appealing to clients at specific points in time.

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