Union Investment. Your partner for professional asset management solutions

Transcription

1 Union Investment Your partner for professional asset management solutions

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3 Contents Union Investment: your partner for professional asset management solutions 7 The risk managers: your reliable partner for institutional investors 9 Portfolio management: a highly skilled and systematic process 10 Union Investment offers you a wide range of options 18 Fund reporting and client support: clear answers to your questions 20 Contact us 22 3

4 Close to markets and close to clients Dear investor Institutional investors need a dependable partner for their investments now more than ever. Partnership, professionalism and transparency have been the key principles guiding Union Investment for more than 50 years. Rooted in these values and firmly anchored in the German cooperative financial services network, we are and will remain one of the leading asset managers for institutional investors in Germany and internationally. We cater for the specific requirements of our institutional clients by offering innovative capital preservation strategies, customised asset management solutions and specially tailored concepts for diversifying portfolios across various asset classes and investment approaches. The qualities that distinguish us from our competitors are our in-depth understanding of our clients' needs, our consistent focus on innovation and our uncompromising commitment to transparency. Our investment experts are adept operators in the global financial markets. We have also built an international presence by forging strategic alliances with selected partners. We are convinced that our combination of fundamental research and active portfolio management is the best way to add value for institutional investors. Active risk management is a key element in our investment process. Contact us if you would like further details. Our highly experienced fund managers and client relationship managers can offer you a wide range of solutions to meet your investment objectives. Alexander Schindler Member of the Board of Managing Directors of Union Asset Management Holding AG Nikolaus Sillem Member of the Board of Managing Directors of Union Investment Institutional GmbH 4

5 Text Union Investment: key figures Assets under management: Retail funds: Segregated funds: Other formats: billion billion 61.1 billion 28.4 billion Employees: 2,464 Clients: 4.2 million As at July

6 We offer solutions that are specially designed to meet institutional investors' specific needs. 6

7 Union Investment: your partner for professional asset management solutions Union Investment Group is one of Germany's largest asset managers for private and institutional investors. Originally established in 1956, we offer an extensive product range covering the various asset classes and investment styles: Equity, fixed-income, money market, real estate, alternative investments and quantitative structured solutions. Firmly rooted in our German home market, we have also grown into a leading asset manager internationally through subsidiaries and strategic partnerships. Union Investment Institutional GmbH is one of the leading asset managers forinstitutional investors. Quoniam Asset Management GmbH is a premier provider of quantitative portfolio management solutions. Union Investment Real Estate GmbH is one of Germany's major real-estate fundmanagement companies. Union Investment Institutional Property GmbH specialises in meeting the individual needs of institutional investors seeking property investment solutions Union Investment Privatfonds GmbH has won numerous awards for its mutual fund business. BEA Union Investment Management Ltd., a joint venture with the Bank of East Asia Ltd., is the centre of competence for Asian capital and distribution markets. Union Asset Management Holding AG, Frankfurt am Main Union Investment Institutional GmbH, Frankfurt am Main Quoniam Asset Management GmbH, Frankfurt am Main 20 per cent held by the company's management Union Investment Privatfonds GmbH, Frankfurt am Main Union Investment Real Estate GmbH, Hamburg Union Investment Institutional Property GmbH, Frankfurt am Main Union Investment Luxembourg S. A., Luxemburg BEA Union Investment Management Ltd., Hongkong Joint venture (49 per cent) 7

8 Union Investment has acted as a professional asset management partner to institutional investors for decades. Risk management forms an integral part of our investment process. 8

9 The risk managers: your reliable partner for institutional investors Every risk presents an opportunity. Our objective is to exploit these opportunities by working in close partnership with our institutional clients. Risk management plays a central role in this process. Our focus on risk management is underpinned by our sig - ni ficant investment in human resources and IT systems over many years. This successful approach has made Union Investment one of the fastest-growing institu tional asset managers in Germany. Sophisticated clientele Our sophisticated client base includes banks, pension funds, insurance companies, church organisations, industrial corporations and non-profit organisations such as charitable foundations and trade associations both inside and outside Germany. Union Investment manages assets worth some 111 billion in this extremely fast-growing segment. It is necessary to take calculated risks in order to generate the level of returns that investors are looking for. We deliberately run these risks in order to take full advan tage of the upside potential available to investors. State-ofthe-art risk management systems help us utilise existing risk budgets more efficiently, thereby raising investment returns. Our experts opti mise these risk budgets, paying particular attention to the regulatory framework and clients' individual needs. Proven capital preservation strategies Union Investment is Germany's market leader in the management of capital preservation mandates for institutional investors, for which we offer a range of innovative solutions. IMMUNO is our sophisticated and effective capital preservation strategy. It covers all asset classes and can be adjusted to suit client's risk appetite and return expectations. The IMMUNO strategy has paid off: Market leader in Germany with approximately 18.4 billion in 199 IMMUNO capital preservation mandates The model has been continuously refined since portfolio managers specialising in risk management Effective absolute-return management especially in strong bear markets 9

10 Portfolio management: a highly skilled and systematic process The successful management of any asset class requires experts who are masters of their trade. This applies equally to the conventional management of asset classes such as money market, equity, fixed-income and real estate as well as to the management of alternative investments. Union Investment employs a total of 180 pecialists of Investments. We use a clearly defined investment process. This process ensures transparency and a systematic approach in our asset management and in our business relationships with investors and partners. It includes an innovative risk management system that helps us to assess risk realistically and use it to add value. Ultimately, however, decisions are still taken by people. We pursue a team approach to ensure that we take full advantage of the entire range of expertise available to us. Our portfolio managers consult each other regularly and collabo rate on investment strategies which are then individually implemented in the portfolios. Sound investment philosophy Successful asset management relies on fundamental principles. The pillars of our investment philosophy are: A transparent investment process, which allows clients to keep track of our investment decisions A broad diversification of investment decisions, which helps to limit risks Active positioning, aiming at creating additional value versus market benchmarks A team approach in which the expertise of our specialists adds value in terms of increased returns Consistent risk control throughout the entire investment process 10

11 Portfolio management: a highly skilled and systematic process Distinct investment style Union Investment offers institutional investors a choice of two distinct active investment styles: a classical portfolio management approach and through Quoniam Asset Management a quantitative approach. The classical approach The active management approach based on fundamental research forms the core of Union Investment's investment philosophy. We are convinced that our combination of fundamental research and active long-term security selection is the best way to generate superior long term investment returns for our clients. We implement our fundamental active style in equity portfolio management using a bottom-up approach, whereas for fixed-income we predominantly use a top-down approach. Managers of both equity and fixed-income portfolios cover all market segments worldwide. Consistently following our fundamental approach, our portfolio managers spend up to 80 per cent of their time on research. The quantitative approach Quoniam Asset Management GmbH is an investment boutique that specialises in quanti tative portfolio management, currently employing 79 people. It uses scientific and IT-based models to devise investment strategies that meet the challenges posed by the capital markets. Quoniams product strategies are based on clearly structured quantitative investment processes that have a standard basic structure: comprehensive quantitative and statistical methods are used to translate fundamental information on companies and markets into forecasts of investment returns. The relevant factors applied in each case relate to equity valuations, investor sentiment, macroeconomics and technical market indicators. The balanced mix and large number of factors used ensure a high predic tive quality. Portfolios are constructed using optimisation techniques that factor in investment objec tives, investment returns, risks and transaction costs. The value added for investors is reflected in the disciplined and transparent implemen - tation of the relevant investment approach. The quantitative investment processes used are refined on an ongoing basis with the help of a team of specialists currently consisting of some 32 portfolio management and research professionals. Quoniam's product range covers all major asset classes such as equities, bonds, money market instruments, asset allocation and hedge funds. 11

12 Portfolio management: a highly skilled and systematic process The investment process Fundamental analysis is the key element for Union Investment s portfolio managers. During the highly-structured process, the management team identifies risks and prospects for all potential investment targets. As a basic principle in the equity and fixed-income portfolio management, the individual portfolio manager is responsible for both, portfolio management and analysis. Our investment process is divided into four steps Analysis Performance analysis and risk controlling Research Opportunity and risk identification Integrated risk management Execution Counterparty and default risk controlling Portfolio construction Calculation and management of risks 12

13 Portfolio management: a highly skilled and systematic process Bonds The investment process we use for fixed-income securities is based on a disciplined top-down approach, in which both macroeconomic factors and specific market characteristics play a key role. The investment decisions taken are based on fundamental research and quantitative analysis. The various stages of the investment process are designed to combine top-down and bottom-up approaches. Our in-house economic research department monitors all relevant macroeconomic data. Each individual bond is also analysed in terms of its credit risk, issuer selection, qualitative research and liquidity. Equities The investment process for equities is largely based on a bottom-up approach. In the stock selection process, every company is evaluated using qualitative and quantitative criteria. A special focus is hereby placed on good relation - ships to the Management Board. In order to keep decision-making lines short, individual portfolio managers are responsible for both, portfolio management and analysis. This guarantees a high level of proximity to researched markets and in-depth know-how in stock selection. 13

14 Portfolio management: a highly skilled and systematic process Real estate With over 40 years of expertise in real estate, Union Investment is a major player in the global markets. With experienced teams and local co-operation partners, we have an extensive geographical presence both in estab - lished European markets and in growth markets of Asia and Latin America. With this approach, we profit from arising opportunities whilst actively managing inherent risks. In the process we succeed in highly complex transactions. Thus, a foundation for the successful enhancement of high quality real estate portfolios is laid when buying, selling and actively managing tenant relationships. Union Investment is a leading provider of open-ended real-estate funds, operating in 25 countries worldwide. With total fund assets in excess of 20.8 billion, we are also one of Europe's leading investment managers of real-estate portfolios. We manage a broadly diversified property portfolio ranging from offices, retail pre mises and hotels to logisticsrelated buildings. In total, our professionals manage some 305 objects and projects in outstanding locations across the world's major cities. Union Investment offers specialised real-estate investments through retail- and segregated funds for institutional investors. Source: December

15 Portfolio management: a highly skilled and systematic process We provide investors with access to solid real-estate investments that maintain their value over time. 15

16 Portfolio management: a highly skilled and systematic process Sophisticated asset allocation The asset allocation unit draws on the investment ideas derived from the equity, fixed-income and real estate portfolio management, and enriched by their own research fin dings paint a comprehensive picture of trends in global financial markets. Symmetric asset allocation Asset allocation is essentially based on assessing the relative value of different asset classes. Starting with the analysis, comparison and evaluation of all relevant quantitative and qualitative factors, the views are then systematically merged in order to reach a concrete allocation decision. This ultimately forms the basis for the implementation of the strategy in the individual portfolios. Asymmetric asset allocation A pre-defined capital preservation requirement, places additional demands on the asset allocation process. In these cases, we successfully apply our IMMUNO concept, as it exploits arising opportunities to that extent that it meets the risk preference of the individual investor. A pre-requisite to this concept, is an intensive analysis of the individual investor s risk preference. Whereas symmetric asset allocation largely relies on forecasts of expected returns in different asset classes and allocates individual securities accordingly, the asymmetric asset allocation integrates active positions into the investors risk limits. From this basis, the portfolio's risk budget is derived. Risk management constitutes an integral part of the investment process. During the construction of a portfolio, the exact amount of risk, as previously determined, is taken. To this end, forecasts of investment returns are always viewed in relation to indivi dual risk components. The expected return is analysed in the context of the risks anticipated for this return. This process focuses on volatilities and correlations. Effective risk management is used to hedge the relevant portfolios. When managing its asymmetric IMMUNO portfolios, Union Investment keeps the price risks in the respective asset classes under constant review to determine the extent to which the corresponding risk budgets are being utilised. Finally, the risk allocation levels regularly calcu lated in this way are implemented for each asset class in accordance with the relevant investment strategies. 16

17 Portfolio management: a highly skilled and systematic process The IMMUNO concept offers investors a hedging stra tegy for all market phases that fits perfectly with their risk preferences. 17

18 Union Investment offers you a wide range of options Institutional investors differ not only in terms of their specific requirements and objectives, they need to act according to various regulatory restrictions. We design so lutions which suit the needs and expectations of institutional investors. In order to satisfy these requirements, Union Investment offers an extensive range of custom-fit investment vehicles. Apart from traditional segregated accounts, we offer a variety of institutional funds including advisory and outsourcing mandates, as well as other institutional asset management solutions. 18

19 Union Investment offers you a wide range of options Segregated funds (German Spezialfonds) Segregated funds (German Spezialfonds) offer the maximum degree of flexibility, enabling Union Investment to meet the differing strategic objectives and requirements of institutional investors. These funds offer a high level of customisation. Individual performance expec tations, risk preference, the investment universe as well as the investment horizon are key to the strategic alignment of portfolios. Therefore we can precisely adapt to our investors needs. Institutional funds Institutional funds have been in the focus of Union Investment's product development activities for years. These retail funds, especially designed to meet the needs of professional investors, are becoming increasingly important. They can be purchased for smaller volumes at special conditions and are therefore available to a broad base of institutional investors. The funds combine the demand for a high degree of fungibility and broad risk diversification and therefore represent depending on the type of strategic asset allocation an attractive alternative to diversify portfolios. Advisory and outsourcing mandates In addition to products and services offered in our funds, Union Investment also offers its asset management expertise to institutional investors in advisory and outsourcing man dates. For advisory mandates, Union Investment acts as an external asset management advisor and makes investment recommendations. Ultimate decision making autho rity, as well as order management and compliance with investment limits rests with the advised company. This is usually but not necessarily a (master) investment company (Master-KAG). For outsourcing mandates, the investment decision authority and performance responsibility is transferred to Union Investment as external manager the portfolio is managed by us. Here, we assume the tasks of an asset managing company, and the duty for active portfolio management and adequate diversification. In return, the advised investment company is responsible for accounting and fund reporting. 19

20 Fund reporting and client support: clear answers to your questions Each portfolio has a unique profile that incorporates all the relevant restrictions and procedures. Our fund reporting provides the transparency as required by the investor in order to have a sound basis for their decisions at all times. Transparent reporting At Union Investment, a team of experienced specialists takes care of all reporting aspects, ranging from gathering clients investment requirements to their actual implementation. Due to a state-of-the art database technique, we dispose of an ample range of reporting options. Our ultimo reports are provided one day after fund prices have been calculated. These reports can directly be downloaded from our extranet website. When calculating key performance figures of our portfolios, we pay special attention to derivatives used. Thus, our figures present a more accurate picture of the economic reality in the portfolio (the actual exposure ). Our reporting comprises a variety of informative risk figures and risk-adjusted performance measures. For individual client groups, we also calculate solvency ratios as used in their specific regu latory environment. 20

21 Customised client services A key element of our success is our client services approach which is based on partnership and understanding. Our relationships are therefore long-term oriented with a focus on reli ability and close relationship. Our client relationship managers regard themselves as partners to our investors and provide comprehensive and competent expert advice. Starting from the initial contact and the presentation of the adequate investment strategy and investment style, the Account Manager takes care of all legal aspects during the set-up of the mandate and provides constant client service in the later stages of the relationship. The basis of all our investment decisions is a deep understanding of the requirements of the client. With this, we are well prepared to guarantee a best possible asset management solution which exactly fits the needs of our investors. The portfolio manager is responsible for translating the investment policy into the respective investment strategy as required by the client. He also organises regular client review meetings and is the point of contact for all mandatespecific questions. Effective communication For many years, Union Investment has been investing in comprehensive data management systems in order to guarantee a smooth communication between portfolio management and the independent risk control unit. Both units share a single database which provides them with an accurate picture of the current risk taken in the individual portfolios at any time. Efficient client service Recent surveys conducted by the leading consultants Greenwich Associates and TELOS, acknowledge the outstanding quality of Union Investment's portfolio management and client service approach. The surveys confirm that our strategy over the recent years to focus on client services based on partnership together with professionalism in portfolio management has proven to be correct. 21

22 Contact us Union Asset Management Holding AG is the holding company for individual asset managementand service companies Union Asset Management Holding AG Wiesenhüttenstraße 10 D Frankfurt am Main Telephone Telefax Internet Executive Board: Hans Joachim Reinke, Chief Executive Officer Ulrich Köhne Alexander Schindler Jens Wilhelm Shareholders: DZ BANK AG, Frankfurt am Main R+V Holding AG, Wiesbaden WGZ BANK AG, Düsseldorf Primary bank (including holding companies, affiliates and associations) Germany Germany Union Investment Institutional GmbH Wiesenhüttenstraße 10 D Frankfurt am Main Telephone Telefax Internet Quoniam Asset Management GmbH Westhafentower, Westhafenplatz 1 D Frankfurt am Main Telephone Telefax info@quoniam.de Internet Union Investment Real Estate GmbH Caffamacherreihe 8 D Hamburg Telephone Telefax service@union-investment.de Internet Union Investment Institutional Property GmbH Caffamacherreihe Hamburg Telephon: Telefax: cmi@union-investment.de Internet 22

23 Europe Austria Union Investment Institutional GmbH Repräsentanz Österreich Rudigierstraße 10A A-4020 Linz Telephone Telefax Internet Luxembourg Union Investment Luxembourg S. A. 308, route d Esch L-1471 Luxembourg Telephone Telefax service@union-investment.lu Internet Poland Union Investment TFI S. A. IBC II ul. Polna 11 PL Warszawa Telephone Telefax tfi@union-investment.pl Internet Switzerland Payment agent and distributor DZ Privatbank Schweiz AG Münsterhof 12 CH-8022 Zürich Telephon Telefax service@dz-privatbank.ch Internet IPConcept (Schweiz) AG In Gassen 6 / Postfach CH-8022 Zürich Telefon Telefax info@ipconcept.ch Internet Asia Hong Kong BEA Union Investment Management Limited 5/F, The Bank of East Asia Building 10 Des Voeux Road Central Hong Kong Telephone Telefax

24 Disclaimer Whilst every effort has been made to ensure the accuracy of the information in this brochure, liability cannot be accepted other than in cases of gross negligence. For extensive product-specific information and details of opportunities and risks for the funds, please refer to the latest sales prospectuses, the Bank's terms and conditions or the annual and half-yearly reports that can be obtained free of charge from the client service offered by Union Investment Service Bank AG. These documents constitute the sole binding basis for the purchase of these funds. The content of this document does not constitute a recommendation and is not a substitute for the Bank's personal investment advice or for personal tax advice from a suitably qualified professional. Although Union Investment Privatfonds. All information, illustrations and explanations are presented as at July 2013 unless stated otherwise. Published by Union Investment Institutional GmbH Wiesenhüttenstraße Frankfurt am Main Germany Tel: Fax: Last revised: July 2013