Platform model pays off as crises hit rivals

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

 

Bucking the trend

He says: “As Universal-Investment is the legal entity of funds on the platform, we are in charge of every fund, so the quality of the partner is critical.

“We have 400 funds here, managed by external fund partners. It is important for us to know with whom we work, and that our partners are operationally capable. External managers bring the investment strategies, but we also have to understand the fund concept. We must understand it and be able to stand behind it.”

Vorbeck says €10m is a realistic minimum needed for Universal-Investment to go ahead with a fund, but its normal target would be between €30m and €50m.
He has seen a strong trend to launch ‘mixed funds’ – also called multi-asset or balanced – and among institutional allocators a use of core/satellite approach to selecting funds, with high beta products such as ETFs at the centre of the portfolio, surrounded by highly specialised, ‘high alpha’ managers around the edges.

Universal-Investment does not offer ETFs from its platform, but has the focused, niche and absolute return funds that can fulfil the functions of ‘satellites’. While Universal-Investment satisfies its clients’ investment needs, by no means does it suggest allocations, or funds.

Vorbeck says: “We have a very heterogeneous structure, with 400 funds from highly specialised managers to many wealth management funds, trend followers and absolute return products, but we have no in-house philosophy. We just concentrate on the quality of the products.”

He says investors turning to mixed funds is an understandable reaction to the crisis. The trend for bankers to leave their employers and set up independently, often starting such wealth preservation, diversified portfolios with Universal-Investment in the process, has also helped the platform remain attractive to fund buyers.

 

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