Universal targets institutions in marketing push

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GERMANY - Universal Investment, one of Germany’s top providers of institutional funds, or spezialfonds, is launching a marketing offensive in a bid to invigorate its low-volume mutual funds business with institutional clients.

Universal said it would create a new marketing subsidiary to actively sell its 89 mutual funds to institutional clients and other finance professionals in Germany from the start of next month. The clients include insurers, banks, pension funds as well as other fund managers and brokers.

Bernd Wagner, chief executive of Universal, said the new subsidiary, Universal-Vertriebs-Services (UVS), had been given the mission to triple net inflows to the firm’s mutual funds by the 2007/2008 business year.

This means that net inflows should rise to one billion euros in 2007/2008 from 370 million euros in the business year just past (2003/2004).

“We currently have 89 mutual funds with a volume of 2.4 million euros. That is just too little, so we have to do something about it,” Wagner told journalists at a news conference in Frankfurt.

Universal’s 89 mutual funds are managed by external asset managers as well as those at the five private banks which are its shareholders. Universal cooperates with a total of 160 asset managers, 60 of whom were foreign, including such houses as Fidelity, Goldman Sachs and UBS.

Wagner also said that as part the marketing offensive, UVS would scrutinise the funds according to performance criteria. Those not meeting the criteria would not be offered to institutional investors, he said, adding that this could include funds managed by its shareholders.

Such an approach marks the first time that Universal, in a sense, is acting as an investment advisor. In its traditional Spezialfonds business, the firm has always limited itself to administration and other back-office services.

Universal’s five shareholders are Bankhaus Lampe, Hauck & Aufhäuser, Merck Fink, Berenberg and the private banking arm of Landesbank Baden-Württemberg.

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