Union Investment is continuing to grow. At €14.0bn, the cooperative fund company once again clearly exceeded the good net sales of the previous year (first half of 2016: €10.6bn) in the first six months.
“This year, we remain one of the top-performing asset management companies in terms of inflows, and have been growing at an above-average rate compared with the sector as a whole for years. Between the end of 2014 and May 2017 alone, our market share in Germany rose continuously from 12.4 to 14.2 per cent,” says Hans Joachim Reinke, CEO of Union Investment. The assets under management increased by 12.4% compared to the middle of 2016.
Net inflows in institutional business amounted to €9.9bn for the first half of 2017, a rise of 50% on the prior-year period (H1 2016: €6.6bn). The total assets managed by Union Investment for institutional clients reached a record €180.4bn (30 June 2016: €158.1bn). Products with greater potential returns, such as corporate and emerging market bonds, proved particularly popular in the first half of 2017. In addition, multi-asset and absolute-return products and real estate investments grew in importance. These are used by institutional clients to increase the diversification of their portfolios. “All areas of institutional business are experiencing high demand, with investors mainly focusing on diversification and regulation,” observed Reinke.
In addition, sustainable solutions have continued to be very much sought after. The steadily growing interest in sustainably managed funds has resulted in the volume of assets held in such funds by Union Investment increasing over the past twelve months to approximately €30bn (30 June 2016: €21bn). “This makes us the leading provider of sustainable investment funds in Germany,” commented Reinke.
Besides these long-term strategies, low to negative interest rates mean that some investors have an ongoing need to take action with regard to money invested for the short term. Many institutional clients are using money market and money market linked funds to manage their liquid assets. In response to this need, Union Investment offers the UniInstitutionalReserve Plus, for example – a money market linked fund that holds short-dated corporate bonds and floating-rate notes and has now grown to €4.5bn (30 June 2016: €2.2bn).
“Overall, we can look back on an initial six months of extremely dynamic growth in institutional business. We even managed to beat our record for new business from the first half of 2015 of €9.4bn. There is brisk demand for our solutions from customers inside and outside the cooperative sector, both in Germany and abroad,” stated Reinke.
In retail business, inflows from new business continued the past five years’ upward trajectory, amounting to €4.1bn in the first half of 2017 (H1 2016: €4.0bn). “Our retail business has been consistently popular with clients for years, and has generated inflows beyond our expectations,” explained Reinke. Once again, multiasset solutions were best-sellers, attracting net inflows of €3.4 billion in the first half of 2017 (H1 2016: €2.7bn), of which €2.4bn (H1 2016: €1.5bn) was attributable to the six PrivatFonds funds. Open-ended real estate funds were also extremely popular with retail investors, who had paid in €1.0bn by the end of June 2017 (30 June 2016: €1.5bn).