On the heels of the integration of Fisch Asset Management's Luxembourg fund into its €748bn assets under management, Universal-Investment is partnering with Sustainable Insight Capital Management (SICM) to launch the UI I - SICM US Equity Fund. Specialising in sustainable investments, this Undertaking for Collective Investment in Transferable Securities (UCITS) aims to target European institutional investors in Luxembourg and thereby give them access to SICM's US strategy.
SICM was founded in 2013 by a management team with institutional experience. It is led by Kevin Parker, founder and managing partner of the firm, who has over 30 years of experience on Wall Street. His previous roles include global head of equities at Deutsche Bank and CEO of Deutsche Bank Asset Management.
A press release announcing the fund's arrival in Luxembourg says that UI I - SICM US Equity Fund "reflects Kevin Parker's experience in climate change and sustainable investing". He is known as "one of the initiators to develop responsible investment strategies and was accountable for building up the firm’s research and investment capabilities in this area,” SICM adds.
In search of alpha
Taking into account environmental, social and governance aspects in its investment decisions, the strategy of the new fund is to invest in US equities and to achieve an attractive return relative to its benchmark, the S&P 500. The fund's portfolio contains only between 40 and 60 "high alpha stocks in the S&P 500 universe". A measure of an investment's performance relative to a certain index, an alpha of one--starting from zero as a base-- demonstrates that a stock's return on investment has outperformed the overall market average by 1% over a defined period.
Capturing high alpha--normally built on a differentiated fundamental research process--should become somewhat easier with SICM's approach. Using big data technology, the US asset management company claims to be able to condense millions of data points from over 1,800 third party providers, such as banks and investment research firms.
So far, it has primarily been US investors who have benefited from our differentiated strategy. We are confident that our unique process and investment methodology will also convince investors abroad
With its alpha capture strategy, Parker is confident that SICM's new fund will be attractive in Luxembourg: "So far, it is mainly US investors who have benefited from our differentiated strategy. We are confident that our unique investment process and methodology will also convince foreign investors."
Focus on Luxembourg
For Universal-Investment, the association with SICM is a godsend, according to Katja Müller, its chief customer officer: "With Kevin Parker and his team, we have gained another experienced partner as part of our internationalisation strategy. Currently, we see an increasing number of Anglo-Saxon asset managers looking to conquer the European and international market with a Luxembourg UCITS structure and rely on independent platforms like ours."
Currently, we see an increasing number of Anglo-Saxon asset managers looking to conquer the European and international market with a Luxembourg UCITS structure and rely on independent platforms like ours.
Universal-Investment, true to its status as one of the leading super ManCos in both Luxembourg and Europe, therefore caters to the needs of foreign asset managers wanting to register a UCITS in the grand duchy. "We provide these asset managers with all-round support for their market entry – from administration to fund distribution," explains Müller.
Universal-Investment has more than 1,000 employees with offices in Frankfurt, Luxembourg, Dublin and Krakow for the management of 2,000 mutual fund and special fund mandates. As far as its Luxembourg operations are concerned, Universal-Investment has over €105bn under management, enjoying growth of almost €1bn compared to last year.
This story was first published in French on . It has been translated and edited for Delano.