25 years of VP Fund Solutions – interview with Daniel Siepmann, Head Asset Servicing

Correct! However, it should not be forgotten that VP Fund Solutions - as part of our Asset Servicing business segment - consists of two units in Liechtenstein and Luxembourg. Although each is legally independent, together they form the umbrella for our fund administration activities within VP Bank Group. Our successes must therefore always be viewed as a whole, as both units contribute to our segment results. Our fund management company in Luxembourg was founded in 1998, one year earlier. So the 25 is certainly valid for both companies.

What are, in your opinion, the highlights of the 25-year history?

I would like to highlight four milestones. In 2013, we were able to take over 30 funds with fund assets of EUR 1 billion as part of an asset deal with HSBC Trinkaus & Burkhardt in Luxembourg. A unified brand presence of IFOS in Vaduz and the former VPB Finance S.A. in Luxembourg in 2015 was an important step in operating under the common umbrella of VP Fund Solutions. 2018 was also significant, when we successfully entered the Scandinavian market with VP Fund Solutions in Luxembourg. In addition, in 2018 we took over the activities of Carnegie Fund Services S.A. as a management company in Luxembourg.

Just last week I took part in one of the regular client visits. A loyal and satisfied customer for 20 years - for me, these are the highlights of my day! They show the success of the ongoing efforts of our employees over all these years.

We often read about awards for our fund business. What are the biggest successes here?

A great testament to our high quality standards is the fact that the fund products of the VP Fund Solutions platform have repeatedly won international awards. I am therefore particularly pleased that we are continually receiving awards that impressively confirm the quality of our products and services.

In recent years we have been delighted to receive numerous awards, including the Refinitiv Lipper Fund Awards, the Germany Lipper Fund Awards, the Mountain View Fund Awards, the Austrian Fund Awards and the Euro Fund Awards. In most cases, the investment management for these funds is the responsibility of the clients themselves. We are proud that our high quality of service helps our clients to manage their funds so successfully.

How satisfied are you with the current year so far?

Thanks to the successful marketing strategy for our business area from both locations and the associated acquisition of new clients, we were able to report a solid net new money balance. This year we have already been able to bring several exciting and attractive fund projects to market with new and existing clients. I am particularly pleased that we have also succeeded in actively marketing our fund offering in Asia and that we have been able to sign an additional fund from an asset manager in Singapore. In Luxembourg, we were also able to expand our partnership with a German fund management company, in the spring and take over the administration and depositary function of additional funds.

All of this shows that we are able to score highly with clients and external partners, both with our products and with our services. This is in line with the growth strategy of our asset servicing and promises further exciting projects in the second half of the year.

How important is the fund business for VP Bank?

At group level, we summarise the comprehensive range of services for funds under the term Asset Servicing. Our fund business has been making a strong contribution to the group result for years. And our client assets provide almost 27 per cent of the assets under management of the VP Bank Group. With almost 100 employees at both locations, we represent around 9 per cent of the total workforce - in 2015, the year the joint umbrella organisation "VP Fund Solutions" was established, there were still 57.

More than 94 per cent of the assets under management originate from private label funds, while around 6 per cent can be attributed to VP Bank products. This is a very important figure, as it allows us to communicate to the market that we are a service provider that is very successful in the market and is not dependent on in-house business. VP Fund Solutions, as a division of Asset Servicing, recorded a new record of 90 clients at both locations, Luxembourg and Liechtenstein, and around 266 funds last year.

With our range of services, we also make a significant contribution to strengthening the attractiveness of VP Bank as a wealth management service provider for intermediaries and wealthy private clients.

How do you see the future development of the fund industry?

Luxembourg is the second most important fund location in the world and an attractive domicile for the establishment of fund management companies. In Luxembourg, the fund industry has developed into a professional, innovative and high-performance economic sector over the past decades.

The fund industry in Liechtenstein has also developed impressively in recent years. With future-oriented fund regulation, Liechtenstein has positioned itself as a dynamic, cross-border hub for private label funds, particularly in German-speaking Europe.

What challenges do you expect?

We will have to deal with a growing number of regulatory developments, leading to increased substance requirements and greater complexity.

However, we see this in a positive light and as a clear growth opportunity for VP Fund Solutions. There is great potential here for the future - by solving our administrative processes digitally in order to have enough time for the core competence of personal advice. A consistent IT strategy and targeted digitalisation initiatives are therefore essential. The fact that the financial industry is changing significantly with its increasing degree of digitalisation therefore offers great opportunities for VP Fund Solutions. Our group-wide "Strategy 2026" also takes these trends fully into account.

What are your further plans for VP Bank's asset servicing?

In the future, diversification of the client base and acquisition of new clients will continue to be of central importance. Our asset servicing has a clear growth strategy - we are pursuing the goal of further expanding our long-standing existing partnerships and entering into new collaborations. We also want to benefit from the rapidly growing market in Asia. VP Fund Solutions offers EU/EEA-compliant fund products at our two locations in Luxembourg and Liechtenstein, which - thanks to their EU passport - are ideally suited for distribution in Europe, but also in Asia.

We are actively driving forward the growth strategy of asset servicing with further international initiatives in order to further expand our existing service offering in Europe and Asia. In the German and Singapore markets, we are currently working with external intermediaries to increase the frequency even further. In Germany, the focus is on mandates from institutional clients, in Singapore it is asset managers and family offices.

Thank you for the interview and continued success!