Sean O'Driscoll (Universal Investment): The Silent Champion
Universal-Investment ranked first in both the third party ManCo and the AIFM 2019 PwC barometer. The company has always maintained a low profile in Luxembourg, but this is about to change as it accelerates its international expansion. An interview with its Luxembourg Country Head Sean O'Driscoll.
Could you describe Universal-Investment in a few words?
Universal-Investment was established by German private banks to provide fund administration and management company services in 1968. As one of the industry’s pioneers we launched the first white-label platform for asset managers in 1970 and created the first master fund in the German market in 1992. In 2017, Universal-Investment was acquired by Montagu Private Equity. Throughout the last five decades, we have been growing alongside our long-standing clients’ needs and innovated together with them. This led to the opening of our Luxembourg office 15 years ago. Today, Universal-Investment is the largest third-party ManCo in Luxembourg and largest AIFM according to the 2019 PwC barometer. We employ 70 experts locally - 700 globally - who cover all the functions to support a robust governance model: risk, compliance, portfolio management, central administration, oversight, structuring, tax, innovation and distribution. As of September 2019, our assets under management (AuM) is approximately €60 billion, with €465 billion at group level. Our ambition today is to leverage our expertise and brand to boost our international expansion.
“By 2023, we want to be the leading European fund servicing platform for all asset-classes.”
What is your strategy in the next four years?
Our first goal is to pass the €500bn AuM milestone at group level and to be the leading European fund servicing platform for all asset-classes by 2023. Christian Reitz, Head of Digital Transformation alongside with Daniel Andemeskel, our Head of Innovation Management, are running a number of initiatives involving AI and blockchain technologies. Universal-Investment aims to be one of the digital pioneers, launching the first completely digital fund and provide fully digitalized services for digital assets, currencies and funds. We leverage technology to enhance our distribution platform, assisting our clients by providing them with critical information required to assess and penetrate markets, helping them reach their goals. Clearly, data plays a key role in our business going forward and our teams are working hard on the best way to leverage this data in order to add value for our clients. Ultimately, we have no plans to deviate from our DNA as an infrastructure platform, providing solutions to our clients allowing them to focus on their core business and support their growth ambitions.
What opportunities and challenges have you identified for Universal-Investment and Luxembourg?
I believe there are three main opportunities: firstly, the increasingly complex regulatory environment. Luxembourg is an outsourced market of administration services, so having the right level of expertise and substance puts us in a perfect position to support our clients by managing and navigating the regulatory challenges, allowing them to focus on their core business. It is difficult for some players to meet the increased regulatory requirements such as 18/698, which brings enhanced due diligence, substance and reporting obligations. Secondly, managing our growth potential with the support and financial strength from our institutional shareholders, while leveraging our proven track record, reputation and strong brand. I believe we are well positioned to service our clients and continue to achieve our growth objectives. We continue to investigate opportunities to expand across Europe, as well as the US and Asia. Finally, market disruptions such as Brexit allow us to bring our long-standing capabilities to UK clients providing them continued access to the European market. Many clients are working on revisiting their set-up as result of regulatory requirements, market change and other variables, and we are the right partner to support them.
Regarding challenges, I see there are two main elements. First, recruitment: We constantly need to attract very skilled, knowledgeable and experienced resources with specific competencies. We are competing with the industry for ESG, alternative funds, along with risk and compliance experts. I believe it is important that for our clients, both Luxembourg as a location and our firm maintain a highly attractive brand! The other aspect to consider is the international competition: Luxembourg has had an amazing 20-year streak in the funds business, but we all need to keep in focus that the international market is increasingly competitive, and that Luxembourg needs to remain the benchmark in terms of efficiency, pricing and time to market. This will ensure we can handle the pressure that other jurisdictions are putting on Luxembourg - the largest European funds center.