The best of both worlds.
Strategy. The asset manager Eyb & Wallwitz has been performing above average for institutional clients for 15 years. "Now we want to make our quality and successful asset management strategies easily accessible to even more investors," explains Eduardo Mollo Cunha, partner at Eyb & Wallwitz. His answer to the Fintech revolution is Eyb & Wallwitz digital.
Success can hurt sometimes. At the beginning of 2019, asset manager Eyb & Wallwitz vom Finanzen Verlag was awarded the Golden Bull for Fund Innovation of the Year. "After that, many investors wanted to invest in our asset management fund Phaidros Funds Schumpeter Aktien. But we ourselves did not have the capacity for individual care. And via the traditional distribution channels they did not get the fund at all or they had to pay extremely high commissions. That really made me sick," remembers sich Eduardo Mollo Cunha. Three days Cunha has hiccups. "Out of frustration, because we missed investment capital and investors missed return. But it also had something good: Es was the initial spark. We decided to look for a solution that would allow anyone to simply invest with us in the future without having to invest millions."
This is the third time that Eyb & Wallwitz has reinvented itself. Founded in 2004, the asset manager with its Phaidros Funds initially manages only a few selected family assets.
When Cunha joined the company in 2009, he broadened the business. "At the time, we focused the company on institutional investors with intensive individual support - banks, pension funds, family offices, foundations. Now is the time to take the next step and take advantage of the opportunities offered by the digital revolution."
Alone, Eyb & Wallwitz is an asset manager, not a Fintech. "We agreed that we couldn't build a digital platform ourselves - and we didn't want to. Deshalb we have teamed up mit WMD Kapital, who have already developed a corresponding technology." The result makes him "really happy". "Via Eyb & Wallwitz digital (www.eybwallwitz.digital), any self-decider can open an account including a securities account in just about 20 minutes and be legitimised directly online without printing a paper. Within 24 hours the client has a custody account number and then invests in one or more of our investment strategies at wholesale investor conditions. It couldn't be simpler or cheaper."
In concrete terms, investors pay ongoing fees of 0.6 percent to the platform operator and have access to institutional conditions for the strategies. "This is already cheaper than buying our funds from direct banks or other houses.
In addition, there are no issue surcharges, transaction costs or custodian fees. If the platform is successful, everyone benefits. If ten million euros are invested there, their fee drops to 0.5 percent. Werden reaches 25 million, it drops to 0.4 percent.
"At the latest then," Cunha is convinced, "we will be far cheaper than all the Fintechs that are currently causing so much stir in Germany. Aber at the same time investors get a completely different product. Fintechs and Robo-Advisor usually invest in ETFs and leave the asset allocation to an algorithm. We employ experienced fund managers who select individual equities and adjust the allocation of asset classes to nach Marktsituation each. And their expertise has been proven by an above-average track record of more than ten years. That has a completely different quality."
Cunha is rather sceptical about the hype surrounding the Fintech algorithms. "A Robo Advisor doesn't reinvent the investment. Das is just another distribution channel for investors who don't need advice. It has to be simple and cheap, of course. Aber at the end, it's the performance that decides."
Who would like to get an overview of the actual successes of the "digital scene", Cunha advises to take a look at the real money test of Brokervergleich.de.
"The test has been running since 2015, is based on a balanced strategy - 50 Prozent Aktien, 50 percent bonds - and today comprises 20 providers. Their results are sobering. Over the past four years, the benchmark - ein ETF each on MSCI World and Barclays Global Aggregate Bonds - has been missed by miles. Eyb & Wallwitz digital, on the other hand, would have clearly beaten the benchmark net of all fees. Compared to asset management like ours, they simply don't perform. Das is like placing an innovative electric drive next to an old Beetle motor."
To invest digitally does not have to mean to do without the proven and the successful. "With Eyb & Wallwitz digital, we bring together the best of both worlds - active asset management from a proven source with an excellent track record and easy digital access." This is good for the customers and good for the company. Size plays an important role in the future viability of an asset manager. "The capital entrusted to us has increased more than tenfold in the last ten years," says Cunha, concluding: "We have now reached the EUR 1.6 billion mark for assets under management. Our digital offensive will help us to become one of the ten largest bank-independent asset managers in Germany in the coming years."
Something different - the Eyb & Wallwitz investment philosophy.
"It's true that the way we work is perceived as more conservative," reflects Eduardo Mollo Cunha, "but for me that's a compliment. We don't buy anything we don't understand, we are not interested in short-term speculation and we value companies with sustainable business models".
Der Erfolg von Eyb & Wallwitz also has a lot to do with the special investment philosophy. "We do not orient ourselves by indices. Our managers can therefore draw on the full resources of the company and are completely independent. They use all possibilities of digital data evaluation. But the decision about title selection and allocation is made by the expert - no algorithm."
At the beginning of the analysis there is always the economic world view of the house. That's what it looks like right now: We are in an age of stagnation, too much is being saved and too little invested. As a result, real interest rates are low, economic growth is weak and inflation low. The high level of indebtedness in the Western world, the ageing of society, declining technological progress - all these factors are contributing to the fact that the age of stagnation will continue for a long time to come. "It seems reasonable that investors should pay a valuation premium for growth, such as in the tech sector, or for areas with higher yields - bonds outside the investment grade range," explains Cunha.
According to this philosophy Eyb & Wallwitz equips its strategies - a balanced and a conservative mixed fund as well as an equity and a bond fund.
"Everyone has four or five stars at Morningstar," informs Cunha, "and everyone is regularly among the top 20 percent in various comparison periods, usually among the top ten percent in their class. It shows how well our engine is running."
Eyb & Wallwitz; www.eybwallwitz.de
Eduardo Mollo Cunha; 069 / 714019791
Photos: istock Essentials/ipopba // Eyb & Wallwitz