Germany's Universal buys SEB master KAG
GERMANY - German asset manager Universal-Investment has widened its asset range to hedge funds by purchasing one of the German subsidiaries of Sweden's SEB.
As part of its restructuring of the German business, SEB has chosen Universal-Investment to provide administrative services to hedge funds via its master KAG.
The purchase for an undisclosed sum adds another €110m to Universal's current €134bn assets under management.
In a press release, the German investment house announced that "further mandates from German-speaking countries" would follow over the next weeks.
Late last year, Universal was granted permission by the German supervisor BaFin to issue and manage hedge funds.
The KAG provider noted that the purchase from SEB would "strengthen its position as the only provider of administration services for the full range of asset classes in Germany".
Until now, Universal-Investment had managed around €2bn in hedge fund assets for institutional investors via its Luxemburg subsidiary.
Current SEB master KAG managing director Bernd Schusta will now become joint head, alongside Bernd Vorbeck from the board of Universal-Investment.
The company noted that the SEB master KAG would be "integrated into Universal-Investment in the course of the year".
The Swedish bank sold its German retail business to Santander at the beginning of the year and said it now wanted to "focus on the business with companies and institutional clients, institutional real estate customers as well as asset management in the German market".
Together with the three other major Swedish banks, SEB is under pressure from the Swedish supervisory authority Finansinspektionen to hold common equity tier 1 capital of at least 10% as of next year and 12% as of January 2015.
At the end of 2011, SEB was well above that requirement with a core tier 1 capital ratio of 13.7%, but the bank saw its profit before credit losses decrease by 12% to SEK3.4bn (€390m) compared to 2010's fourth quarter.