Germany: Universal adds E5bn institutional AUM

GERMANY - Universal Investment, a German provider of institutional funds, or Spezialfonds, said net inflows to the funds totalled 5.4 billion euros in the first nine months of this year – the highest of any provider based on statistics from German fund industry association BVI.

As a result, Universal said its institutional assets under management on September 30 totalled 43.6 billion euros, up 34% from the previous year. The number of Spezialfonds mandates also rose year-on-year to 538 from 466.

The firm attributed its strong performance primarily to continued strong demand among institutional investors for “master fund solutions.” It said that of the 72 new Spezialfonds mandates, most were for master funds.

In a master fund, back-office administration of all funds are centralised within one provider. According to Universal, which pioneered master funds in 1990, the solution greatly reduces cost while boosting efficiency, since it eliminates back-office administration for each individual fund.

Universal’s performance marks a sharp contrast with that of Deutsche Asset Management. DeAM, Germany’s second-leading provider of Spezialfonds, said last Friday that it had lost a total of 13 billion euros in institutional assets in the third quarter alone, bringing its AUM to 308 billion euros.

However, Universal mutual funds for mainly institutional investors did not do as well as its Spezialfonds. The Frankfurt-based provider said that on 30 September 2004, its mutual funds had 2.4 billion euros in assets, or 400 million more than a year ago.

Universal has therefore launched a marketing offensive – including the creation of a new subsidiary called UVS – to invigorate its low-volume mutual funds business.

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