Thomas Hirsiger knows exactly what his investment customers want. Many are high net worth individuals and family offices who want a strategic component to provide capital protection and growth. In pursuit of this twofold objective, Hirsiger has joined forces with Universal-Investment to create a segment fund model for retail funds. Finiens Wealth Management uses a set of requirements to select the best partners – partners who are free to determine the asset class weightings within their segment then select the most suitable investments.
As a businessman, Hirsiger is persuaded that active asset management improves performance. "Investors see sustainable, long-term value gains when the asset allocation weightings are dynamic, with each partner pursuing their own clearly defined investment process and style. Selective stock picking can generate additional returns for investors," Hirsiger believes. "That's why our segment managers are free to follow their own individual investment philosophy. The combination of different investment styles creates optimum diversification within the fund." Hirsiger is careful to choose specialists with complementary investment styles for the different segments. All of these asset management boutiques have a proven track record and are headed up by strong personalities. The Finiens Futura 1 UI (ISIN DE000A0N9820) demonstrates the effectiveness of the approach. Since its launch in 2009, the balanced global fund with an average equity weighting of around 30 percent has consistently outperformed the Morningstar benchmark index and maintained low volatility. The fund weathered the market upheaval at year-end 2018 better than many of its rivals. "Our investors appreciate our focus on long-term capital preservation," comments Hirsiger. "To date, no key customers have redeemed their units."
Universal-Investment is taking on the role of private-label partner and investment company for both Finiens funds. Through the partnership, the innovative segmented retail fund model is now available on the market. The custodian is the private bank Hauck & Aufhäuser. "By bringing together a number of portfolio management and administration service specialists, we have developed a high-quality, structured strategy and risk management approach that operates on several levels," the Finiens Managing Director explains. "Investors can rely on thorough quality controls, which help to preserve their capital."
Having headed up a financial planning team and spent many years advising companies, Thomas Hirsiger recognises how important it is for businesses to have a clear overview of potential risks at all times. Since 2013, Hirsiger has been building on the lessons learned as member of the Board of ASAGO, the company he co-founded. ASAGO provides efficient software solutions that help companies and local authorities to identify and manage key risks. In an interview with universal spotlight, Hirsiger explained how the ASAGO software and system work.
universal spotlight: Why do companies need IT tools for strategic planning and risk management?
Thomas Hirsiger: You have to manage business risk carefully in order to make active and intelligent use of the opportunities created by those risks. We have therefore developed a modular software solution that is efficient and works for all industries. The software ensures that all key issues are defined and handled in a structured way. My personal experience has taught me that Board members do not have a detailed knowledge of what is going on in their company.
The tool has three modules – what do they do?
The first module is the cockpit: just as its namesake displays all the information a pilot needs to fly a plane safely, our tool gives Board members a clear overview of the status of strategic projects, the company's risk profile and risk-bearing capacity. The cockpit is also useful for making efficient use of human and capital resources.
With the strategy module, all managers can view the business model workflow and have an overview of the main strategic issues.
The third element of the software is the risk management module, which identifies what issues are most relevant for the company, based on a list of around 200 risks, including financial, corporate and legal risks. Other risks might be linked to the employee structure or succession planning. The module puts the risks in order and finds ways to resolve them. The software tool reduces personal and corporate risk exposure for Board members and management teams.
Where do you feel real change is needed?
One of the greatest problems for any company is a lack of transparency and poor communication across the board. Individuals may have specific knowledge and designated responsibilities, but in many cases their expertise is not available to all critical functions or not up-to-date, which can have serious consequences. A lot of companies don't engage enough with issues around their risk profile, strengths and weaknesses. Although the risks are identified, there is no standard, transparent process for managing those risks, no clear responsibilities or deadlines.
Author: Thomas Hirsiger
Date of issue: 2/27/2020
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