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The conference „Germany Institutional Forum“ will take place in Frankfurt am Main at the beginning of December. The independent industry expert Markus Hill will moderate a panel there. Within the topic, Opportunistic Alternative Investments, topics such as investments in hedge funds, private equity, and commodities, and „miscellaneous“ will be discussed. IPE Institutional Investment Editor-in-Chief Frank Schnattinger talked to him about the panel, other conference contents, about Frankfurt am Main and about the moderation of the MH Focus Roundtable „Fund Boutiques, Family Offices and Absolute Return“, which will take place shortly before in Frankfurt on November 27. At this event, the topic of „Family Offices and Manager Selection“ will be discussed closely in connection with the topic of Liquid Alternatives.

IPE Institutional Investment: Which topics will be addressed at the conference „Germany Institutional Forum“?

Hill: The conference takes place annually and is aimed at institutional investors. A wide range of topics are addressed in lectures and panels: Convertible Bond Market, Macro Outlook, Asset Allocation, Factor Investing, Real Assets (Real Estate, Energy, Infrastructure), and Global Fixed Income. Topics such as opportunistic alternative investments, investments in emerging markets, and the integration of ESG criteria in the investment process for institutional investors will also be discussed. My experience on my panel last year on „Passive versus active management, the edition of an old debate“ is that it can be very controversial.

IPE Institutional Investment: Which specific points are taken up and discussed in your panel?

Hill: As in the previous year, I do not want to anticipate the content of my discussion and the interests of my panel members. The topic „Opportustic Alternative Investments“ will be at the center of the discussion. Participants will include Trutz Rendtorff, Chief Financial Officer of the Karg Foundation, Marcus Storr, Head of Hedge Funds at FERI Trust GmbH, and Tara Moor, Managing Director at Guggenheim Partners. My experience from other contexts is that the topic offers many starting points for discussion. I experienced Dr. Thomas Rüschen of Deutsche Oppenheim Family Office AG as a moderator at the Private Wealth Forum of the Markets Group in Munich in October. He had discussed the topic more with a focus on semi-institutional investors and HNWIs. Our panel in Frankfurt will focus on the question of which alternative investments can still generate attractive returns for institutional investors in risk-adjusted terms: What role does private equity play in a diversified portfolio? What alternatives are there in the area of hedge funds and commodities? Are there investment alternatives that are perhaps often only accessible with increased due diligence effort and a special know-how network? In the current low-interest-rate environment, the tension between a liquid and non-liquid alternative investments is perhaps also worthy of additional consideration. The role of product packaging could also be an issue. Real assets – direct investment, AIFs, listed equity, these topics could also be of additional interest. In due diligence, one often finds different perspectives in family offices, foundations, and classic institutional investors.

IPE Institutional Investment: Do you have a specific opinion on the panel’s topic area?

Hill: No, the panelists have their area of knowledge. I can only make suggestions. What I notice again and again is that nowadays the area of liquid and non-liquid products, including direct investments, is viewed much more „holistically“ on the product selection side of institutional and semi-institutional. This can be seen, for example, from the fact that the area of equity investments – especially venture capital and private equity – is also found in combination with the selection of direct investments in the area of real assets (real estate, etc.), for example, and that the specialist areas of investors are also involved in an intensive exchange of ideas within the organisation. An indicator for this could also be that these topics and the experts are often no longer strictly separated from one another, even at specialist conferences, and that there is a greater willingness to discuss them on an „interdisciplinary“ basis. Family offices and foundations, but also pension schemes and consultants, represent a special area here, with „soft“ demarcation from insurance companies or pension funds. Perhaps this impression of this site is also since 2015. I have accompanied small events twice a year with Prof. Dr. Carlos Jarillo as a moderator. As the author of the book „Strategic Logic – The Sources of Long-Term Corporate Profitability“ and manager of a value fund, one of the topics has been frequent before semi-institutional investors: Value Investing – differences, advantages and disadvantages of liquid fund management approaches (classic, more liquid mutual funds) versus non-liquid product solutions (private equity). At the last meeting in Munich, interestingly enough, in connection with my panel topic at the German Institutional Forum, the connection between value investing, sustainability, and the selection criteria of commodity investments were also discussed.

IPE Institutional Investment: In the run-up to the German Institutional Forum on November 27, you organized a separate event in Frankfurt on the topic of „Fund Boutiques, Family Offices, and Absolute Return“. What is the focus of your event?

Hill: This MH Focus Roundtable is an investor event on a very small scale, which will be held at the premises of MM. Warburg & Co. in Frankfurt. Reiner Konrad from the Multi-Family Office will give a presentation on „Family Offices, Fund Boutiques & Manager Selection“. Dr. Björn Borchers from Warburg Invest will give a lecture on „Liquid Alternatives – Volatility as an alternative source of return“, Manfred Gridl from Gridl Asset Management will give a lecture on „Our response to the ECB interest rate policy“. (See also attached photo). I will give a short intro and moderate the event. It will be a breakfast exchange of ideas in a small group.

IPE Institutional Investment: Why did you choose this topic?

Hill: Since 2013, I have always been able to accompany panel discussions with fund selectors on the topic of due diligence of funds (liquid and non-liquid). I am also familiar with the field of fund selection from my work, as well as from supporting fund boutiques in special topics. For three years, including in 2018 – in addition to FundForum International also at funds excellence in Frankfurt – I have been able to discuss these topics even more exclusively with family offices. The idea was born, so to speak, from many professional discussions with product selection managers on the family office side – in one-on-one meetings on projects (manager selection and fund concept checks at fund boutiques) and in connection with moderation, lecture and article topics that I have worked on. It is interesting to note that fund boutiques are another special field. Here, areas such as business start-up, life cycle, seed money in addition to track record, fund size, and investment process are also interesting fields of discussion. Factors such as manager personality, specialisation, skin-in-the-game, independence, and, last but not least, long-term thinking on the entrepreneurial side appear to be even more decisive. Not to forget: These independents do what they love!

IPE Institutional Investment: Which topic area are you currently looking at more closely

Hill: Opportunistic Alternative Investments can be interpreted in different ways, maybe I just interpret it in my way. One approach would be to look at the things that often don’t need to be sold in principle. These include many providers from the mid-market, „boutiques“, with products and services that are certainly „needed“ but which one often does not encounter or only with difficulty. On the one hand, this category exists because the providers do not market themselves aggressively or do not want to aggressively „advertise“ themselves in this form, and on the other hand, because this approach to marketing is often less recommendable for these providers, also for reputation reasons. Here one gets to know again and again addresses, which offer excellent quality. The performance is right, the professional background is right, you come from the target group to which you provide these products, you are invested in your products yourself, etc. – a market that I see completely separate from the more „market scream“ classic investment product market. To put it in a completely value-free way, the starting positions for both product categories are simply different: One has something that is needed, but nobody knows about it. The other has something that may not necessarily be needed or there is an enormous surplus of comparable competitors – inevitably the sales approach is different. Interesting here are many entrepreneurially set up AIF structures in many areas – real assets in various, especially niche areas, as an example. In the family office sector, such things are often found, combined with the unwillingness to offer one’s products, which one is convinced of with skin-in-the-game, to third parties. Here, for reasons of public welfare, a helpful maxim would often be appropriate: „Do good and talk about it!

IPE Institutional Investment: Thank you very much for the interview.

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Source: www.institutional-investment.de
Photo: www.pixabay.com

“It is good to rub and polish our mind against that of others” (Michel Eyquem de Montaigne). Frankfurt am Main, as a city, always offers sufficient reason for rubbing and polishing. On the one hand, against the background of topics such as Brexit, ECB policy, and the financial industry, the importance of the business location is given priority; on the other hand, the city is often wrongly accused of lacking attractiveness in areas such as culture and quality of life. Controversial views invite dialogue, so far so good. Frankfurt’s qualities as a central location and multiplier are undisputed when it comes to topics such as financial communication and financial industry events. In addition to well-known formats such as the BVI Asset Management Conference, Institutional Money Congress, or formats such as the German Equity Forum, there are a large number of lesser-known, smaller events. What are the differences between certain formats? When and where in spring will value investing fans enjoy and enjoy the exchange of ideas in the Main metropolis?

Formats of events

1. education & networking

Some events serve the exchange of ideas from industry to industry. Here the focus is more on expanding know-how and networking with participants from the financial industry. Especially for sponsors of such events, it is important at the beginning to sort out the exact character of these formats. Otherwise, the normal impression is created here: “More hunters than a game”. An investor then sits, so to speak, between three sales employees of product suppliers. A dialogue-free of compulsion and open to results often cannot develop here. One feels the intention and is upset. This is one of the reasons why many “real” investors increasingly stay away from such formats. A problem that many classic event organizers, not only in Frankfurt, have to struggle with. It is an unfortunate trend, as many of these formats offer very high-quality lectures and panel discussions. For sponsors who like to exchange ideas in the industry or who are looking for more visibility, these formats offer a good platform. The professional audience can be grateful if a “public-interest” task (diffusion of knowledge) is taken on by financial market players here, so to speak.

A disadvantaged group of sponsors is often foreign companies that have not thoroughly screened the market here and in the end unintentionally spent a substantial part of their marketing budget on large-format educational events, although they wanted to invest in business development. Visibility and market research seems to be less in demand for many of these addresses. What seems more interesting to these providers is the targeted, direct contact with investors, who are expected to sign “tickets” in the foreseeable future, once a relationship of trust has been established. This is a purpose for which many of the large events are not actually intended and with which the organizers can generally be overburdened. The support of “formats with a high scattering loss” is no problem for major players from abroad, companies with boutique character will lack the sustainable financial strength after a while to be able to pursue a market entry strategy in the long term. To be fair, it has to be said that most organizers of this event category emphasize the educational character and pure networking orientation of the event, at least in marketing materials. Perhaps one explanation for the suboptimal selection of formats among suppliers can simply be that the sales and marketing departments have not yet been sufficiently coordinated. The objectives of marketing / PR and sales managers do not necessarily have to be the same for structural reasons (example: criteria for measurability of success – internal discussion: press clipping, page impression versus “tickets”, sales, business development).

2. education & business development

Small, specialized events are a popular format for developing direct investor contact. These are organized by the product providers either internally or with external support. These formats are often invitation-only and participants are pre-filtered. In contrast to the above-mentioned “educational events”, which have a greater scattering loss with a purely business development objective, these events usually pursue the purpose of maintaining existing customers or acquiring new customers. Of course, there is always a core educational element and also the goal of gaining multipliers for your concern (business development). For many investors, the charm of such formats lies in the fact that you will find many professional colleagues at these events, with whom you can then exchange views on specialist topics on a small scale. All participants are also aware that the speakers want to present products or services. However, since it is often known from experience that here investors also exchange ideas directly with investors in a pleasant atmosphere, this is gladly accepted – as long as the sales staff of the product provider show sufficient tact in communication.

Spring 2018 – Value Investing, joy and the cultivated exchange of ideas

Examples of different formats dealing with Value Investing in spring: Prof. Dr. J. Carlos Jarillo of SIA Funds AG covers the topic “Strategic Investing, Value Investing & Fund Boutiques” on 19.4. (Transparency – MH-Kurzintro, “bias”). Topics such as the differences between private equity funds and classic liquid investment funds and family office long-term thinking will also be discussed. Dr. Hendrik Leber and his team from ACATIS Investment will organize the ACATIS Value Conference, a classic for value investors, on May 25. Frank Fischer from Shareholder Value AG will give the keynote speech at the Equity Forum spring conference (14.-15.5.), quoting the format: “Listed companies present their current business figures and outlook for the following financial year to selected investors, analysts, financial journalists, and other capital market players”. It is interesting to note that in the value investing sector, many product packages/approaches often complement each other, that there are variations, different worlds come together: The areas of the liquid and non-liquid investment world have many common intersections, at least at the “edges” (decision-making processes of investors, product selection, asset allocation, etc.).

The Value Investing Meeting of value DACH will take place in Frankfurt on 23.5., at the end of the event a completely different format for the professional exchange of ideas of people interested in value investing, in the organizer’s own words: “At the meetings, we will exchange ideas with each other in a relaxed atmosphere. We are out and about in various restaurants in different parts of the city of Frankfurt. In doing so, we also broaden our culinary horizons”. Coincidentally, the season for the Fressgassfest in Frankfurt begins on the same day, traditionally one of the first and best-known street festivals of the season – for friends of sun, wine, and conviviality a highlight of the year, not only for the financial industry. To begin with, let’s take up the remarks about an often seemingly critical metropolis – Frankfurt am Main, enjoyment, thinking outside the box and a cultivated exchange of ideas are by no means mutually exclusive!

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Source: www.institutional-investment.de
Photo: www.pixabay.com

Frankfurt is the central location for the professional exchange of ideas in the fund industry in Germany. Events such as the BVI Asset Management Conference on the 6th of October are offering this year again the opportunity, to stay informed of all the current developments in the industry. Markus Hill spoke in the name of FONDSBOUTIQUEN.DE to Thomas Richter, CEO of The German Fund Association BVI, about the conference topics, current affairs and as well about the special “charm” the city Frankfurt has to offer as a venue.

Hill: Mr. Richter, on the 6th of October the BVI Asset Management Conference takes place in Frankfurt. What distinguishes this industry event from other formats? Which topics are this years priorities?

Richter: The BVI Asset Management Conference is meanwhile an industry gathering/networking of the year. It gives an overview on current developments at the capital market and about the regulatory and strategic challenges the industry is facing. It is not a trade fair, rather a non-commercial platform. This year, among others ex-constitutionalists Udo Di Fabio, Head of Asset Management at the European Commission Sven Gentner and Consumer Protection Chairman Klaus Müller are among the guests. The topics range from the current challenges in Europe about the risk management of pension funds right up to cyber security and digitalization trends in fund sales.

Hill: Frankfurt is an attractive location for sharing and exchanging expertise in the fund industry. Many fund companies have their headquarters here. What is it in your eyes that makes the “Main metropolis” so attractive to many industry peers? With the BREXIT in mind is there still additional potential for this location?

Richter: Frankfurt can build on many strengths. The city plays an important role in Europe in regard to the monetary policy and financial market regulations. It has evolved in recent years to the home of national and international financial organizations and regulatory agencies such as: ECB, Federal Financial Supervisory Authority (BaFin), German Central Bank and the EU insurance supervisory EIOPA which all are already here. Whether Frankfurt attracts more financial companies from the Thames to the Main after the BREXIT, remains a question. The density is already high: Nowhere else in Germany are more companies from the financial industry located than in Frankfurt. For the fund industry Frankfurt unlike Luxembourg is the location par excellence especially for product development, fund management and distribution.

Hill: At present which topics are your main focus? What is the focal point of your activities in the next 12 months?

Richter: The topics on pension plan and retirement arrangements are highly up to date. After the summer break the Federal Ministry of Labour and Social Affairs (BMAS) intends to submit a pension policy concept. That should be exciting, because for the promotion of occupational pensions, BVI receivables such as the opting out or the target pension are currently being discussed in politics. At EU level, the financial market policy MiFID II and the PRIIPs-
Regulation are perennial favorites.

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Source: www.institutional-investment.de
Photo: www.pixabay.de