Investment fund business is an important earnings pillar of the LLB Group having significant growth potential. In the year under report, our investment fund business grew by CHF 6.0 billion. The fund assets it manages reached a volume of CHF 36.6 billion.
Our four investment fund companies in three countries offer our clients access both to the European and the Swiss economic areas. This makes us one of the most versatile fund vendors in Europe. Our fund management companies focus on providing private label fund solutions (known in Austria as special funds or Master-KAG solutions). They are very individual solutions, highly suitable for efficiently managing and structuring large volumes of assets. In line with our “all in one shop” concept, we offer our home markets all the products and services involved in private label fund business. This creates the maximum degree of flexibility to enable us to fulfil all our clients’ wishes. We plan and set up made-to-measure funds, both in-house and for independent asset managers, family offices and other promoters. We structure and manage these vehicles and ensure modern, state-of-the-art risk management. At our business locations in Vaduz and Zurich, we complement our services by assuming a representative function for foreign funds. In Liechtenstein and Austria, we take over the function of a custodian bank / depositary.
In 2020, we intend to intensify the marketing of our funds powerhouse and promote the distribution of our fund products through specific marketing and communication measures. The aim here is to establish our range of services even more firmly in our home markets.
Fund business in Liechtenstein and Switzerland
Through LLB Fund Services AG we operate a fund management company in Vaduz which – based on its holistic and needs-oriented advisory approach – covers the entire spectrum of private label fund services ranging from the setting up of a fund, to the initial issuance of units, all the way to the provision of services throughout the life cycle of the fund. Thanks to its membership of the EEA and its customs agreement with Switzerland, Liechtenstein offers unrestricted access to two economic areas – to Switzerland and the European Union – and thus complete flexibility (see chapter “Regulatory framework and developments”).
By acquiring LLB Swiss Investment AG in Zurich in 2018, the LLB Group gained access to the Swiss growth market. LLB Swiss Investment offers its clients tailor-made, efficient fund management, as well as compliance and risk management services according to Swiss law. By focusing on private label funds, it ideally complements the LLB Group’s investment fund business. In addition, it takes over the representative function for foreign funds in Switzerland – which is also a business sector offering great growth potential. In 2019, LLB Swiss Investment acted as representative for 212 foreign funds; an increase of around 18 per cent compared with the previous year.
The fund services business posted a volume increase in Liechtenstein and Switzerland of CHF 2.2 billion. In comparison with the previous year, we expanded the volume by 14 per cent to CHF 18.0 billion. At the end of 2019, we managed or held in safekeeping a total of 300 investment funds.
Fund business in Austria
LLB Österreich is one of the leading vendors of investment and real estate funds in the Austrian market.
The portfolio of its subsidiary, LLB Invest KAG, comprises customised complete solutions for public funds, funds for large-scale investors and special funds. It also offers special expertise with multi-manager funds and master-KAG solutions. The spectrum of products ranges from money market tracking funds, to bond and equity funds, to asset allocation funds, and extends to real estate and alternative investment funds. A suitable fund solution can be found for almost every requirement.
LLB Immo KAG, another subsidiary company, offers public funds, funds for large-scale investors and two special funds. It has been active successfully for more than fifteen years in real estate funds, and is the growth and innovation leader in this business in the Austrian market. LLB Immo KAG invests directly in high-yield real estate in the stable Austrian and German markets. It pays special attention to the profitable management of properties and the continual, qualitative growth of its portfolios. At the end of 2019, one of LLB Immo KAG’s funds was awarded the Austrian eco-label, the highest sustainability certificate for real estate funds. Real estate funds are regarded as a first-class diversification possibility for portfolios and, especially in the persisting low interest rate environment, as a stable earnings provider.
In comparison with the previous year, LLB increased its fund volume in Austria by 26 per cent and managed 348 funds having a volume of CHF 18.6 billion at the end of 2019. It posted a growth in volume of CHF 3.8 billion.
LLB as custodian bank for funds
LLB is the leading custodian bank in Liechtenstein. As a pioneer in this business and the first bank to offer this service in Liechtenstein, it has acknowledged expertise in the management and administration of complex fund mandates having various strategies and asset classes. LLB Österreich also offers its clients all custodian services from one source.