GERMANY - German asset manager Union Investments saw its assets under management drop by €31bn last year even though it gained 30 new institutional clients.
Union today reported it had net asset outflows of €6.8bn in 2008, compared with inflows of €12.2bn in 2007.
Approximately €10bn in assets were withdrawn on October alone but the asset manager has gained additional clients since then stemming the losses.
Total assets under management now stand at €144bn because of outflows and negative market performance on assets.
Its institutional business generated a negative return of €3.6bn because institutional investors' "drained risk budgets and high demand for liquidity", said Union in a statement.
Nevertheless, the asset manager added 30 new institutional mandates bringing €1.5bn to its portfolio.
In the previous year, 55 new institutional investors choose Union investment but the volume of new assets generated from these mandates was comparatively smaller with €2.2bn.
"In 2008 we had losses in our existing portfolio as well as in inflows but we gained new clients nevertheless," said Rüdiger Ginsberg, chief executive of Union Asset Management Holding AG.
Union reported it had delivered a pre-tax profits of €143m after a record high of €357m in 2007 but Ginsberg is confident Union will turn it around again.
"In the institutional business the current demand - to ensure liquidity at all cost - will not endure," he said at an annual Union Investment briefing.
"Investors need their minimum returns to meet their liabilities and 4% will not be made through classic investments, seeing as the ECB is pushing money back into the investment cycle with its interest rate policy," explained Ginsberg.
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