Daniel Siepmann and Torsten Ries (VP Fund solutions): Building Asset Servicing to provide all fund related services out of one hand

“Our aim is to provide a superior client experience,” say Daniel Siepmann and Torsten Ries, respectively Head of Fund Solutions at VP Bank Group and Member of the Management Board at VP Fund Solutions.

How is VP Fund Solutions evolving ?

All fund-related activities have been consolidated in the Asset Servicing segment, next to the other two segments of the Group: “Liechtenstein” and “International.” This evolution underlines the importance of Asset Servicing in our group where it accounts for approx. 25% of all assets. The first six months of the year allowed us to benefit from very positive inflows. Our model seems to be perfectly in sync with our times: Clients choose us because of our one-stop-shop approach. We offer all relevant services out of one hand. But we also have the flexibility for a modular offering, acting as business partners for other management companies, providing specific parts of the value chain that they are searching for, such as fund administration or custody services. Our strong focus on client service and customer satisfaction are underpinned by the fact that not even 10% of our business originates from within our group. VP Fund Solutions is a third-party private-label fund provider.

How are your clients' needs evolving ?

In short, we see a lot of appetite and money available, but fund initiators waiting for the best moment to kick off their new projects. Some of them are postponing while others tell us that they need more time to complete their fundraising. We remain optimistic, as many market participants feel that the bottom of the crisis has been reached, and they are willing to take advantage of opportunities. The European regulatory framework is still very attractive for anyone willing to set up a UCITS or an AIF Fund. We were recently in Singapore, where the European and Luxembourg brands continue to be extremely attractive and we see a strong demand for European fund structures. We have always invested in close proximity with our clients, which proves precious in challenging times when they need to rely on a trusted partner. We have a very nice pipeline of already signed businesses, even into 2024, so we remain extremely positive.

“As a non-dogmatic player, we also partner with asset managers and other fund management companies who are only looking for a specific piece of the value chain”

What risks and opportunities do you identify ?

On the opportunity side, there is surely the fact that we are one of the last remaining one-stop-shops. As we created a separate “Asset Servicing” segment, we can provide efficiencies and comprehensive solutions , with dedicated people covering our clients' needs. RFPs are much easier to organize, and the overall client experience is superior. Elsewhere, clients need to deal with more entities, more contact people, and more interfaces. But things are not black or white in our industry: As a non-dogmatic player, we also partner with asset managers and fund management companies who are only looking for a specific piece of the value chain. VP Bank, as a bank for intermediaries, sees a lot of value in building relationships with other management companies. On the risk side, we feel that interest rates will have a different impact in different markets: In Germany for example, they will have an impact on real estate markets where we expect the launch of several funds to be postponed. But in Poland for example, the impact will be smaller. Private equity and infrastructure will not be hurt. On the liquid side, we expect investors to shift their asset allocation from bonds or funds and to accounts, where they get a zero-risk performance. In this context, Luxembourg needs to remain competitive by maintaining reasonable costs, avoiding gold-plating, and reducing the ongoing regulatory burden.