Germany’s FERI hails new shareholder MLP

GERMANY - Top executives at investment consultant Feri Institutional Advisors (FIA) have hailed the involvement of new majority shareholder MLP.

Last month, MLP took a 56% stake in Feri Finance, the holding company for FIA, Feri Wealth Management and Feri Rating & Research. The acquisition followed a standing co-operation where Feri develops investment products that MLP distributes to retail and smaller institutional clients.

But the deal fuelled speculation that MLP, a listed firm, may not be committed to FIA in part because of the low margins in the consulting business. "MLP has no use for Feri's institutional consulting arm," said Georg Seil, chief executive of an eponymous consulting firm in Wiesbaden.

However, FIA chief executive Arnd Thorn, and Dirk Söhnholz, FIA managing director, insist that nothing could be farther from the truth.

"We were convinced in our conversations with MLP before the deal that they were committed to the institutional consulting business. If they had not been, we would not have done it," said Thorn, who, along with Feri's other partners, own the remaining 44% stake in the firm.

"Now with the help of MLP, we will be able to step on the gas pedal," he told IPE in an interview this week.

Söhnholz added: "MLP's motivation in acquiring us was to diversify its business. And since we are not just a consultant but also assemble investment products like multi-manager funds, we were the perfect complement to its business."

For MLP, Ulrich Stephan, board executive in charge of asset management, said: "Feri will continue to run its business independently of ours. We are committed to letting it further expand its business and if investment on our side is needed for that, we certainly will support necessary measures."

Shortly before the MLP deal, FIA was hit by the departure of Hartmut Leser, an MD who was one of the firm's best-known consultants in the institutional market.
 
Thorn says: "In the past year, we have hired five new consultants externally. That means we have 25 consultants offering the full range of services, from asset-liability studies to advice on asset allocation to asset manager searches."

Thorn added that since the beginning of the year, FIA had managed to acquire 20 new institutional clients, bringing the total to 120. The number of institutional assets advised on by FIA also increased by €20bn to €305bn, making it the market leader in Germany.

Going forward, Söhnholz said FIA would take an "implemented consulting" approach, meaning, for example, that asset-liability studies would not be offered at any price.

"If a client says to us, I can have a study done for €10,000, then we might have to say: ‘Sorry, but we can't compete with that'. Our priority is to offer a high-quality and comprehensive study," Söhnholz said.