Actively shaping change
Last year, the global economy suffered the biggest shock in recent history. The Covid-19 crisis represents a historic turning point. But it shows that it is precisely times of change that offer great opportunities for active management.
Jens Wilhelm, Member of the Executive Board and head of portfolio management and real estate at Union Investment
We have left behind a challenging year for the stock market. The ups and downs in the battle against the coronavirus were also reflected in the markets. We set our course for stormy weather at the start of the crisis and our portfolios performed well. Many of our investment funds outperformed their benchmark indices. It was partly due to this strong performance that our assets under management reached a record high of 385.9 billion euros.
Thanks to our active management strategy, we were able to offer our clients significant added value in 2020. We have maintained this momentum in 2021 because our selection strategy remains our trump card. The market environment is in a state of flux. We are actively helping to shape this change in order to increase our investors’ assets.
Accurate selection: higher yielding and sustainable returns
Unique aid packages maintain low interest rates. Risky investments therefore offer great potential for returns. Conditions are particularly favourable for shares – loose monetary and expansionary fiscal policies support investment and consumption. If the success of the vaccination programme is maintained, all the signs point to economic recovery. It is clear that certain sectors and businesses are overcoming the crisis better than others, creating selection opportunities for us.
At the same time, sustainability remains key. Accelerated by political considerations and rising client demand, this has long been a central aspect of portfolio management. In setting our goals, we ensure that ecological, social and economic concerns are addressed. This allows us to create benefits for our investors while conserving resources for future generations. To achieve this, we focus on business models that offer the greatest potential on the path toward economic sustainability.
Identifying these “transformation champions” requires thorough analysis and active engagement through constructive dialogue. As an investor and trustee, we are committed to sustainable change and seek to fully harness the opportunities this offers. We continue to build on the leading role we play, drawing on decades of experience, established processes and clear concepts.
"The market environment is in a state of flux. We are actively helping to shape this change in order to increase the assets of our investors."
Member of the Executive Board and head of portfolio management and real estate at Union Investment
Diverse solutions for a complex environment
In this changing economic environment, real estate property also remains an important building block in our clients’ asset structure. Although the Covid-19 pandemic has led to shifts in the real estate property sector, the broad diversification of our investment funds across different types of use, tenants and regions allows us to unlock potential. For example, the logistics sector has proved resilient in these trying times, and residential real estate has also shown stable growth. That is why one of the investments made by Union Investment in 2020 included increasing its share of the ZBI Group to 94.9 percent.
We are constantly on the lookout for future-ready assets. Alternative investments offer institutional clients high yield prospects. We are therefore gradually expanding our expertise in this area through partnerships and new strategies. This year, for example, we acquired a mandate for alternative investment vehicles in Luxembourg worth around five billion euros and are investing in areas such as private equity, private debt and infrastructure.
The Covid-19 pandemic shows how rapidly social and economic circumstances change. Far-reaching trends such as low interest rates and sustainability are driving structural change. For us, this presents opportunities as well as challenges. We are constantly evolving in order to seize these opportunities and create added value for our clients. That is the strength of active management. This is something we work on every day, supported by our highly motivated employees.