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"Ultimately asset management and hard rock music are linked"

Karsten-Dirk Steffens
Country Head abrdn Investments Switzerland AG

 

A portrait of you says that you collect guitars and emulate Metallica in a hard rock band. It's been a long road to becoming country head of abrdn. What forks in the road did you take towards asset management?

Music has fascinated me in all facets throughout my life and has not let go to this day. My three years in London in particular had a huge impact on me in this respect. While I was able to lay the essential foundations for my current career in asset management professionally during this time, it was also a challenge musically, especially because of the many bands I was able to play in. The challenge on the other, professional side, which has always appealed to me, is to place and develop a ‘foreign brand’ in Switzerland in terms of content and exclusivity. Throughout my career, I have always been fascinated by the parallels between music and my profession: Ultimately, despite their differences, asset management and hard rock music are linked by a common pursuit of excellence, risk management and teamwork. Both require a strong passion and a willingness to constantly improve and overcome challenges.

You have been Country Head for five years: what has changed at abrdn Switzerland in that time?

Asset management in Switzerland has developed from a more traditional, bank-orientated market into a dynamic, technologically advanced and internationally networked sector. This has required constant adjustments and in some cases posed major structural challenges. Regulatory changes, new technologies, a growing ESG trend and ever-increasing competition from abroad have reshaped the market. However, the industry has adapted successfully and now offers a wide range of customised solutions that meet the different needs of wealthy private clients and institutional investors. We have slightly modified our product portfolio and the way we work with our clients has also changed. I am very proud of our small, fine and stable team and of what we have achieved together.

The institutional business in Switzerland plays an important role - now also at abrdn. What helped to strengthen this area?

We have always had a slight bias towards the institutional business and the right building blocks, particularly in the area of bonds. In the institutional business in particular, cooperation has changed to the extent that we are working much more closely together and in a more customised way, meaning that the advisory aspect has become extremely important. In addition, the traditional wholesale business has also become a good deal more institutional and therefore more demanding. The key factor here is the diversity of investment strategies. And here Switzerland can score points with a wide range of specialised investment strategies that are tailored to the different needs of institutional investors. These include not only traditional asset classes such as equities and bonds, but also private equity, hedge funds, property and infrastructure. Fortunately, we have succeeded in demonstrating our broad specialisation and expertise.

How has the Swiss asset management market changed as a result of the Credit Suisse takeover?

The acquisition of Credit Suisse by UBS has had a significant impact on the Swiss asset management market and will continue to have an impact on the industry. This historic merger has not only changed the structure of the Swiss financial market, but has also shaken investor confidence and the competitive landscape in the industry. Particularly in asset management, where long-term client relationships are key, this loss of confidence may have a negative impact. This newly created market power could potentially lead to smaller and medium-sized asset managers and independent asset managers coming under even greater pressure. I personally regret this very much. We had a very valued, good and strategic co-operation with CS.

abrdn is now a specialised global asset management provider: What are its specialities?

There is indeed an increasing need for global asset managers to specialise. This stems from a variety of factors driven by the increasing complexity of markets, changing client needs and the growing intensity of competition in the financial industry. Our expertise ranges from traditional investments such as equities and bonds to alternative investments such as private credit, hedge funds, property, infrastructure and active ETFs. I would say that specifically our global bonds (EMD), our small-cap equity offering and global equities (EM) with a dividend component are our flagships. Above all, however, it is our expertise and ability to create customised offers (mandates or managed accounts) according to the individual objectives of our clients.

abrdn is also active in the area of digital assets: How has the response been among Swiss institutional clients?

We are taking the first steps here and have just tokenised our first money market fund, for example. Basically, it's all about innovation and not missing the zeitgeist or the train. The response among Swiss institutional clients to digital assets is characterised by a mixture of growing interest, scepticism and reticence. While interest in innovative blockchain technologies and tokenisation is growing, many institutional investors are still cautious, particularly due to volatility, regulatory uncertainty and sustainability concerns. Nevertheless, acceptance is slowly growing as the infrastructure and regulatory environment in Switzerland is developing positively and is increasingly geared towards the needs of these investors. In the coming years, a broader acceptance of digital assets among institutional investors could be achieved, especially if the market continues to stabilise and tailor-made, ESG-compliant products and solutions are offered.

You own a collection of guitars. Would you tokenise them?

I prefer to play my guitars and I don't see the collection as an asset in itself, but more as loyal and melodious companions, which all have a memory and a story for me first and foremost. So far, I don't know anyone who has wanted to put their guitar in a blockchain. The guitar then only has a stringent past, but no longer has a soul. And in the end, you can no longer play the collection, you can only stake it.