An independent KAG is being set up in Frankfurt by asset manager Lupus alpha to penetrate further the institutional market in Germany. The firm, which was launched just seven months ago, has just received authorisation for its KAG and will now offer ‘Spezialfonds’ alongside its Luxembourg based funds and advisory mandates.
“This is a signal of our commitment to the German market,” says Ralf Lochmueller, one of the five original partners who set up the company last October on leaving INVESCO. The other partners include Christoph Braun and Karel Fickel.
At the beginning of this year, two investment funds specialising in German small caps were launched, which have attracted DM250m in assets. In addition, eight advisory mandates were obtained, totalling DM350m in the past eight months.
Next month, two new funds are due to be launched concentrating on European small and mid caps, and to be managed by Josef Schopf, formerly of DIT, the investment fund operation of Dresdner Bank group.
“We notice an increasing trend among institutional clients away from the horizontal ‘diversification of mediocrity’ via various special-fund managers within one asset class towards a vertical diversification via selected investment managers who have specialised in various asset classes and investment styles,” says Lochmueller. It will be focusing on the small to mid cap segments, using a decision process based on a consistent bottom-up selection process.
The aim is to bring flexibility into the local market as the company is “not forced to standardise all the mandates” as these can be tailored to meet clients’ individual needs, it says. Special funds can be launched with a start-up volume of just DM30m, enabling smaller institutional investors to use its services.
With DM600m in assets currently, Lupus alpha says it hopes to manager some DM3.5bn by the end of 2003.