Union Investment AUM hits new record in H1 2018

Ridhima Sharma
Union Investment AUM hits new record in H1 2018

Union Investment continues to grow. Compared to mid-year 2017, the assets under management of the cooperative fund company rose by 7.5% from €309.6bn to €332.7bn, a new record high in the first half of 2018. At €11.3bn, net sales in the first six months were below the record level of the previous year (first half of 2017: €14.0bn), but exceeded the average of the last ten years of €7.0bn clear. “Despite a challenging environment, we maintained the momentum of our growth and achieved the third-best sales result in a first half of the millennium,” says Hans Joachim Reinke, CEO of Union Investment.

In new business with private customers, the sales trend in the first half of 2018 increased further to €4.7bn. “For years, we have been receiving consistently high levels of popularity in private customer business, as we are increasingly reaching savers with our solutions for asset accumulation, wealth structuring and wealth preservation,” explains Reinke.

Assets under management in retail banking rose by 8.5% to the highest level of €140.2bn. Sales favourites were once again multi-asset solutions. In the first six months net inflows amounted to €3.4bn. Of this amount, €2.3bn was attributable to the six private funds. The strong demand for open-ended real estate funds was again only partially met this year. Private investors invested over €500m.

More and more people are also recognising the opportunities of prudent fund savings for long-term asset accumulation. The number of fund savings contracts grew by nearly a quarter to 2.1 million in the last 12 months. “We are pleased that 92% of investors favour high-return substance investments such as equity, mixed and real estate funds”, says Reinke.

On average, savers spend €158 a month on each fund savings plan at Union Investment. For new savings plans, which have been completed in the last twelve months, the average is €250. At the same level as in previous years, the proportionate business with the Riester pension also grew. Savers invested €640m in the first half of the year. Overall, Union Investment manages just under 4.6 million private savings fund savings plans. This includes the classic savings plans, VL contracts and Riester contracts.

Although institutional sales of €6.6bn in the first half of the year were well below the previous year’s peak of €9.9bn, they still represent one of the strongest sales results in recent years. Assets under Management in institutional sales increased by 6.7% to a new high of €192.5bn. Above all, products with higher risk premiums were in demand in the first half of 2018, with funds with a focus on securitization attracting more demand in particular. The demand for convertible bond funds was also increased. Real estate fund solutions continued to be sought by many institutional investors, with a limited supply of properties with adequate risk-return profiles hampering investment activity.

In addition to these long-term strategies, many institutional clients also used money market funds to manage their liquid assets. This is a challenge given the low interest rates. In response to this demand, Union Investment, for example, offers the UniInstitutional Euro Reserve Plus as a money market-related fund, which has very short-dated corporate bonds or floaters and has since grown to €7.4bn.

Increasingly, sustainable solutions are also in demand. As a result of the continued growth in interest in sustainably managed funds, their holdings in Union Investment have risen from around €30bn to more than € 42bn in the last twelve months.

More on