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"This model helps in the recruitment of new employees"

David Bussmann
Head Asset Management, Albin Kistler

 

Albin Kistler is one of the great success stories of Swiss independent asset managers. However, the original focus on private clients has changed and Albin Kistler now also provides asset management for institutional clients. What was the impetus for this change and development?

Albin Kistler has been looking after individual Swiss pension funds as clients since the company was founded in 1995 and this base has continued to grow organically to an impressive number. With the increasing professionalisation in the institutional sector and the growth opportunities for successful active asset managers, it seemed opportune to align our organisation with this attractive client segment. The BVG structural reform in 2010 was an additional impetus to develop our fund offering with FINMA subordination and to initiate the next growth step. The trend towards fewer and larger pension funds helped us more than we were affected by departures.

Is there a clear distinction in Albin Kistler's offering between private clients and institutional clients?

No. One of Albin Kistler's success factors lies in the simple realisation that we want to achieve the best investment result for each of our clients. We focus purely on discretionary asset management mandates and the Albin Kistler investment funds are used equally for private and institutional clients, simply with different tranches depending on the investor group. This means that all clients benefit from our investment decisions and we achieve standardised portfolio management in implementation. With the same strategy, our clients' portfolios also look practically the same.

As a comparatively small provider, Albin Kistler has decided to build up its asset management expertise in-house. What are the advantages?

Our greatest success factors are our in-house research and the Albin Kistler investment philosophy, which have been continuously developed over the last thirty years. We can only offer our clients a credible service with our own asset management expertise. This approach also enables us to avoid additional costs from third-party providers in client mandates. When it comes to purely administrative matters, we are very happy to work with the best external partners so that we can concentrate on our core business of investment activities and client contacts.

Albin Kistler now also has a fund management licence. Is this more of an opportunity or a necessity for your strategy?

To launch our own real estate fund for Swiss pension funds, we decided to apply for a fund management licence. This ensures that we can hold direct ownership of the properties in the fund for our clients. However, many typical fund management activities such as fund accounting and management are outsourced to recognised specialists in order to achieve an optimal cost structure for us and our clients. In the area of property investments, we have been dependent on the selection of third-party products for our clients, contrary to our philosophy.

Although Albin Kistler has its own range of funds, it does not sell any third-party products. What are the reasons for this?

The best client results are achieved with a long-term investment strategy. In third-party distribution, we often see the urge to follow short-term trends and the providers rely on a large number of different funds, which ultimately do not achieve any added value. We want to accompany our clients on their investment journey and value direct contact so that we can communicate the benefits of the Albin Kistler philosophy directly.

You maintain the philosophy that client advisors also carry out analyses and analysts also bear client responsibility. How can this be reconciled with the increasing need for specialisation in asset management?

This is indeed a challenge and accordingly we take a very careful approach to this working model, depending on the specialisation of our client advisors and analysts. For some of our employees, however, it is very fulfilling to be active on the client side as well as analysing or vice versa. This model helps in the recruitment of new employees, who can develop in one direction or the other depending on their talent. This permeability also increases the investment expertise of client advisors, enhances team spirit and facilitates internal communication.

How is the investment process organised and how are investment decisions made?

The basic prerequisites for our decisions lie in the independent financial analyses and discussions between the analysts and the decision-makers in the companies in the investment universe. Over the years, we have developed a research model that combines the most important parameters of Albin Kistler's investment philosophy and enables a comparison between investment opportunities in the equity and bond sectors. This analysis includes both quantitative and qualitative factors, such as market leadership, management performance and the stability of business models. The Albin Kistler Micro Committee meets every Monday to democratically decide on the composition of our portfolios. Our macro committee sets the direction at investment category level, whereby we are characterised by a steady hand and, in particular, want to correctly reflect long-term trends. There is no star manager culture; all decisions are made as a team. We avoid extreme risks, i.e. each portfolio is diversified in a targeted manner and managed in a standardised manner in line with client specifications.

How have your responsibilities and tasks as Head of Asset Management changed as you have grown?

Of course, new tasks have constantly been added. Until recently, I was able to be active in financial analysis in the healthcare sector in addition to my role as Head of Division. Asset Management now encompasses a broad spectrum of tasks and specialists: Institutional clients, Albin Kistler securities funds, property funds, portfolio management and trade execution. However, we have a strong team of eleven employees and look forward to the opportunities and challenges of the coming years.