December saw the announcement from Universal Investment Group that it was to step into offering ETF white labelling services.
Marcus Kuntz, Group Head of Sales and Fund Distribution, explains that his firm was founded in 1968 to service institutional investors and asset managers in a structure that was peculiar to the German fund industry that put managed accounts into a fund wrapper. The firm is the market leader in Germany in that space where the flexible and liquid fund structure has proved to offer enduring popularity to fund managers.
The firm has technical and legal frameworks with over 500 asset managers around the world.
“Legally we are the fund company and then we delegate the portfolio management in an outsourcing contract to the asset manager and if the asset owner wants to make a change, we can do it in a couple of weeks, depending on the request, complexity & requirement to file at the regulatory authorities,” Kuntz explains.
The firm’s second business, next to the institutional Master-KVG, is the private label fund business with over 250 asset managers on their platform who use their ManCo and administration services to launch white-labelled funds from the firm’s bases in Ireland, Luxembourg and Germany, and soon Liechtenstein
Kuntz explains that they acquired the Metzler ManCo business in Ireland and is now the fastest growing third party ManCo business there, and the largest AIFM in Luxembourg.
“We are servicing both smaller boutique asset managers as well as large players in the market and our clients have an increased interest in following the huge trend of ETFs,” Kuntz says. “Our managers are not typically passive but active so when active ETFs as a topic came into play they wanted to participate in that mega trend so we developed a white label fund solution and see high interest from our asset managers from all around the world.”
The firm’s footprint is the DACH countries of Germany, Austria and Switzerland but it has recently opened an office in Singapore and is seeing renewed interest from around the principal investment hubs in the world as international asset managers increasingly see the strength of the UCITS structure.
“Typically, the first approach for asset managers is to go to Europe but they only realise when they have launched that UCITS gives them opportunities to sell globally and to maybe reimport back to Latin America, for instance, using a Luxembourg structure,” Kuntz says.
“The platform is ready and we have our core solution in Ireland because it is the domicile of choice for a lot of asset managers. But we also have a high request from German asset managers who want to distribute into Germany – but we are domicile agnostic.”
The firm’s distribution offering for asset managers is based on the USD 750 billion in institutional investors that they already have relationships with, plus the fund of funds and large wholesale channels in the DACH region. The firm aims to be able to launch an ETF from first discussion to launch within 4-5 months.
They also offer PR and marketing support for their asset managers, designed to help them gain visibility outside of their home markets. “They are often boutiques so we can help them build the brand,” Kuntz says.
The firm is also targeting neobrokers and roboadvisers. “A lot of our asset managers have tried to use them and learnt that a lot of these players only accept ETFs.”
The firm expects to have its first ETF launch over the next few months.
