Fo­sun’s Ger­man units to team up

Lender Hauck & Aufhaeuser to move as­set man­ager into joint ven­ture with sis­ter firm

The Star Malaysia - StarBiz - - Foreign News -

FRANK­FURT: Two of Fo­sun In­ter­na­tional Ltd’s Ger­man com­pa­nies are about to team up.

Lender Hauck & Aufhaeuser Pri­vat­bankiers AG plans to move its as­set man­age­ment unit into a joint ven­ture with in­sur­ance com­pany Frank­furter Leben-Gruppe at the be­gin­ning of 2019, CEO Michael Bent­lage told Bloomberg News. “It makes sense to bun­dle as­set man­agers within the group. It is a mat­ter of boost­ing com­pet­i­tive­ness,” he said.

Fol­low­ing the takeover by China’s Fo­sun two years ago, the Frank­furt-based bank has em­barked on a num­ber of busi­ness ini­tia­tives in­clud­ing the joint ven­ture with its sis­ter com­pany.

In a first step, the as­set man­age­ment unit is to be spun off from the lender, which re­quires the ap­proval by Ger­man bank­ing su­per­vi­sor Bafin.

“We have al­ready come quite far on this is­sue,” the CEO said. There­after, Frank­furter Leben is planned to take a stake in the new as­set man­ager, prob­a­bly lead­ing to owner con­trol pro­ce­dures, he added. “We ex­pect that all ap­provals will be granted by the be­gin­ning of 2019.”

Frank­furter Leben has spe­cialised in buy­ing up life in­sur­ance poli­cies and con­tin­u­ing to man­age them. Most re­cently, the com­pany re­ported cap­i­tal in­vest­ments of about 10 bil­lion eu­ros. While Frank­furter Leben is likely to ben­e­fit from the lender’s ex­pe­ri­ence in as­set man­age­ment, Hauck & Aufhaeuser could profit from the over­all in­crease in as­sets.

Also re­lated to Fo­sun is Bent­lage’s plan to launch and sell funds for pri­vate in­vestors in China.

“Without our new share­holder, we would never have dared to take this step,” he said. How­ever, the ini­tia­tive looks promis­ing to him. “In a few years’ time, China will be the mar­ket with the high­est growth rates in as­set man­age­ment.”

He wants to sub­mit the lender’s ap­pli­ca­tions for li­cences in China in Septem­ber. “We have sched­uled twelve months for the per­mits,” the CEO said.

Within three years, Hauck & Aufhaeuser plans to cre­ate an as­set man­age­ment com­pany in the coun­try with around 30 em­ploy­ees, which will also use Fo­sun’s sales chan­nels. “This is our first step into the Chi­nese mar­ket. As­set man­age­ment seemed eas­i­est to us,” Bent­lage said.

Back in Ger­many, Hauck & Aufhaeuser is set to start a dig­i­tal as­set man­ager by the end of this year.

Three dif­fer­ent of­fer­ings are planned, he

� said. For in­vest­ments of 50,000 on­wards,

� funds are avail­able. Start­ing at 150,000, in­di­vid­ual stocks and bonds can also be bought. Peo­ple try­ing to in­vest sus­tain­able and seek­ing an au­dit by an ethics com­mit­tee, must

� have at least 300,000 in as­sets.

Un­like some competitors, Bent­lage had the dig­i­tal plat­form de­vel­oped in-house. “We have to digi­tise the en­tire bank any­way, so dig­i­tal as­set man­age­ment means only lit­tle ex­tra costs,” he said.

Ham­burg-based pri­vate bank MMWar­burg & CO as well as Fuer­stlich Castell-sche Bank have started their robo ad­vis­ers in co­op­er­a­tion with Ber­lin-based fin­tech Elin­var GmbH.

In in­vest­ment bank­ing, Bent­lage sees his com­pany on the right track, es­pe­cially with re­gard to small and mid-sized com­pa­nies

� with a mar­ket cap­i­tal­i­sa­tion of up to 1.5bil.

“In the first half of the year we have ac­com­pa­nied four IPOs and var­i­ous cap­i­tal place­ments,” he said.

“I think that we will achieve the same scale in the sec­ond half of the year as well.” Profit Af­ter Sev­eral Weak Years

Af­ter sev­eral weak years, Hauck & Aufhaeuser re­ported a profit af­ter tax of �

26mil for 2017, which in­cluded some spe­cial items.

In 2016, it had in­curred a loss of 8mil and in 2014 and 2015, it achieved a small sur­plus

� of 5mil in each year.

The bank wants to end the cur­rent year

� with over 20mil in pre-tax profit from op­er­at­ing busi­nesses. The bank did not pro­vide a fore­cast on earn­ings af­ter taxes.

“Our new share­holder wants us to be­come more prof­itable. For this, we have to grow and gain in scale,” Bent­lage said. In as­set ser­vic­ing, the lender has man­aged this quite well thanks to the takeover of two Lux­em­bourg­based Sal. Op­pen­heim fund com­pa­nies from Deutsche Bank AG, he added. “Here, we have reached a ver­i­ta­ble size with com­pet­i­tive cost struc­tures.”

He wants to achieve the same in other busi­ness units as well. “Fur­ther ac­qui­si­tions across all busi­ness ar­eas are there­fore con­ceiv­able,” Bent­lage said. — Bloomberg

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