Fund Boutiques: Small is Beautiful

Islamic Finance A fast moving feast Fund Boutiques Is there really something for everyone? What is Climate Change Risk? The USA leads the way foreword > efm 33 Foreword The European insight into Islamic Funds that specialise in investing investment market is according to Sharia law. Standard & Poors explain Islamic always in action. Indices, which have become important benchmarks in Germany, for example, this area of investment. has just renewed some Taking a look at Europe, Matthew Craig offers some of its investment laws, insight into one of Europe's most important financial mainly to prevent open- centers: Dublin. Markus Hill explains the pros and cons end property funds of fund boutiques, with a focus on the German market. from liquidity strains. With the G8-conference in Heiligendamm, Germany, the This was a reaction to issue of climate change came into the international the crisis that three focus. The fund industry had reacted long before and German property funds were facing at end of has launched many sustainability funds to accommodate 2005/Spring 2006. Also, it allows for German REITs, investors’ “green” money. Nedia Miller writes about know as G-REITs, and the first ones are already being them in this issue. launched. In this issue of efm, Rock Capital explain how This magazine also sheds light on some more to find alpha in real estate investments. technical issues, such as derivatives, which are Europe-wide, financial institutions are preparing for explained by LatentZero, the nitty gritty of settlement & the MIFID implementation. In most countries, the details clearing, which is taken care of by Euroclear, and LDIs, are still being discussed as to how exactly investors which are demystified by Matthew Craig. should be informed about front-end commissions and trailer fees. Distributors in Germany are happy because it I wish you a good summer, and hope that you stay is now clear that “best execution” does not mean that ahead of the crowd and up to date! the distributor has to tell the investor to buy the units at one of the stock exchanges. This issue takes a special look at Arabic countries. Matthew Craig writes about funds investing in the Middle East, and Alison Ebbage gives us a deeper Anke Dembowski, editor efm 33 | May/June 2007 > 3 > market developments Small is Beautiful Fund boutiques do show good performance figures and are therefore becoming more and more popular. Markus Hill, an independent Asset Management Consultant, sheds light on some of the reasons why. “As a dwarf you have to do what co-ordinating more than a hundred or giants can’t,” said Niki Lauda. A even a thousand accounts in private provocative sentence which can, asset management. This partly however, well be used to describe the explains the huge number of funds essence of the investment class of investing worldwide, which at first fund boutiques. Many specialised glance seems to contradict the investment firms (fund boutiques) have concept of increasing specialisation. for years met with increasing interest Unless, of course, one counts an on the part of institutional investors and above average ability for proper timing consultants. as one aspect of specialisation. New context Fashion trend or Various studies in recent years (i.e. permanent factor? Südprojekt, FAROS, TELOS) have One example of this pressure on the shown that institutional investors part of fund boutiques are the results increasingly make use of mutual funds of an evaluation (Citywire: chart as investment instruments. Many overleaf) carried out by Universal independent asset managers (fund Investment. Despite the wide variety boutiques) have frequently launched of approaches in the asset so-called private label funds with management sector it is clear that this investment companies. In this type of “class of investments” (in the sense of constellation, the asset manager takes investment sector) is here to stay. the function of a fund consultant who Another interesting aspect for “classic” informs the investment company of his institutional investors seems to be that portfolio management decisions which these specialised firms – frequently the investment company then owner-managed – keep their portfolio implements. These funds originally managers, according to many, for long arose out of the need for periods of time. Set against this rationalisation. Many asset managers background, it seems understandable at some point realised the difficulty of that these firmly established firms 40 > efm 33 | May/June 2007 efm 33 | May/June 2007 > 41 > market developments Fonds Portfolio Flagg. KAG Advisor oder Vermögensver.? WM Aktien Global UI-Fonds Vermögensverwalter Universal-Investment GmbH Wolfgang Mayr Vermögensverwaltung GmbH StarPlus SICAV - Starpoint Vermögensverwalter IPConcept Fund Management S.A. Huber Portfolio AG LINGOHR-SYSTEMATIC-LBB-INVEST Vermögensverwalter Landesbank Berlin Investment GmbH Lingohr & Partner Asset Management GmbH Global Advantage Funds-Major Markets High Value Vermögensverwalter Global Advantage Funds SICAV Keppler Asset Management, Inc., New York Albrech & Cie Optiselect Fonds Thes. Vermögensverwalter Adviser I Funds SICAV Albrech & Cie Vermögensverwaltung AG Portfolio Vermögensverwalter Astra-Fonds FI Vermögensverwalter DWS Investment GmbH Dr. Jens Ehrhardt Kapital AG FMM-Fonds Vermögensverwalter FRANKFURT-TRUST Dr. Jens Ehrhardt Kapital AG ACATIS Aktien Global UI A Vermögensverwalter Universal-Investment GmbH ACATIS Anlageberatung für Investmentfonds GmbH PEH-UNIVERSAL-FONDS VALUE STRATEGIE Vermögensverwalter Universal-Investment GmbH PEH Wertpapier AG 4Q-Value Fonds Universal Vermögensverwalter Universal-Investment GmbH TBF Global Asset Management GmbH Templeton Growth Fund, Inc. Flaggschiff Templeton Growth Fund, Inc. DWS Vermögensbildungsfonds I Flaggschiff DWS Investment GmbH UniGlobal Flaggschiff Union Investment Privatfonds GmbH Portfolio Flaggschiffe MSCI World (gross) FUX DE Equities Global CIF - Global Equity Fund A Flaggschiff Capital International Fund SICAV Robeco N.V. Flaggschiff Robeco Groep (Niederlande) Source: Feri Rating & Research GmbH. Date: 28.02.2007. Peer Group: Equity World. Order: Perf. 5 years (p.a.) frequently talk about a “team the asset manager. in a particular investment sector. Even concept”. Their management A look at performance results of if the fund boutique chosen fluctuation seems “unnaturally” low.