Comment: Family offices and fund boutiques – ESG, crypto-currency and the role of investment companies as incubators (Markus Hill)

„Everything clever has already been thought, you just have to try to think it again“ (Johann Wolfgang von Goethe). As in many other industries, the fund industry is said to be a water-based industry.

If one follows the current intense struggle for the interpretation of definitions in areas such as ESG, SRI and impact investing, one can come to an interesting conclusion: As with the topic of crypto-currency (Libra & Facebook), this appears to be a fruitful prelude to „competition as a discovery procedure“ (Friedrich August von Hayek). As long as not all aspects are set in stone by regulation, very interesting aspects can still develop in the open discussion. What role do family offices, fund boutiques and investment companies play in this context? How is the role of associations to be assessed?

ESG – Medium and long-term thinking

Without starting a comprehensive discussion about terminology: sustainability thinking corresponds very strongly with the way SMEs, family offices and fund boutiques think. Owner-managed structures such as those mentioned are an important factor for an economy – key words: openness to competition, flexibility, speed. ESG, SRI, SDG and Impact Investing – on the product selection and product offering side (independent asset managers, proprietary products in family offices), all “Middle class“ companies want to survive in the long term, without the pressure of quarterly reporting and the usual hectic pace. The prerequisite of being „driven“ by content in this field of activity and of engaging in a constructive competition of ideas appears to be ideal.

Crypto currency – innovation and transparency

Fintech, Blockchain, Artificial Intelligence and the topic of crypto-currency – a lot of industry is currently discussing this with industry or industry with the press. It is a completely different matter whether this discussion is really intensively perceived by investors (!) at the end – often also criticism from product suppliers regarding the media coverage, not only for complex topics. It should be noted that many players in the „digital industry“ appear to be more active than average in the area of social media; the importance of the topics there need not correlate with their real importance for the investor side. Information overflow, economy of attention, or in this case simply the degree of complexity of these topics thus can play a role.

The positive aspect of this phenomenon is that, as with sustainability issues, the industry is almost exemplary in its approach to investor education. Technical information can be regarded as a „debt to be collected“ on the investor side, but can also be constructively supplemented by high-quality content from providers, the press and multipliers (consultants, associations, investment companies etc.) through the aspect of „debt to be collected“. From an economic point of view, this is a welcome driver in terms of the diffusion of knowledge at the level of society as a whole!

Investment companies and associations

Associations such as BVI (Germany), ALFI (Luxembourg), LFAV (Liechtenstein), but also associations such as VuV (Verband unabhängiger Vermögensverwalter) in Frankfurt are intensively accompanying the topic of sustainability as established multipliers. Investment companies such as Universal-Investment, Ampega, Hansainvest, LRI Group etc. also fulfil a valuable function here. They can be considered a „knowledge hub“ in the field of independent investment expertise. Many fund initiators in this segment look after interesting fund concepts. Every investor can find what he is looking for when searching for investment ideas. Perhaps the investment companies will become more active in the future in the area of seeding of fund concepts besides the function as product provider and multiplier. Something new could arise here in the next few years. Family offices and other independent asset managers are already very creative and active in the above-mentioned topics. As the motto from – Helmut Glaßl : we do not need a competition of lobbyists, but a competition of ideas.


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