Investments

Cross-functional thinking within the LLB Group has become even more important within the scope of the new organizational structure that was put in place in 2012. The groupwide alignment of common objectives is an integral part of our client and quality orientation. Equally, greater significance is being placed on the provision of knowledge and the exchange of information between employees, clients and external partners.

Fund services

The Fund Services Organizational Unit is a major driver of growth within the Institutional Clients. This unit supplies made-to-measure funds for independent asset managers and other fund promoters, such as family offices. As a specialist in private labelling business, we are constantly expanding our spectrum of services to improve our competitiveness. In 2012, we implemented several steps to optimize our processes in order to offer our clients state-of-the-art solutions in a rapidly changing regulatory environment. In October 2012, the Fund Services Organizational Unit appointed an expert for data and quality management. This was followed in January 2013 by the recruitment of an IT specialist. Together they will identify and implement improvement potentials. In 2013, we shall pursue two goals: increasing our level of automation to reduce costs and expanding risk management.

In the year under report, we acquired specialist knowledge at an early stage, enabling us to promote ourselves as a provider of alternative funds. The Liechtenstein fund centre is well on the way to becoming a prime location for alternative investment funds such as private equity funds or hedge funds. For this purpose, Liechtenstein rapidly implemented the EU directive for alternative investment fund managers (AIFM). Liechtenstein’s parliament enacted the new AIFM law in autumn 2012. Consequently, from 22 July 2013, it will be possible for an AIF manager to distribute alternative funds throughout Europe from out of Liechtenstein with just one license, and to manage them independent of their domicile (see chapter «Regulatory environment and developments»). We are issuing a newsletter at www.llb.li/aifm to inform interested clients about the opportunities arising from the implementation of the new AIFM directive.

Developments in the fund industry are extremely cyclical; their performance depends heavily on events in the financial markets. In 2012, clients continued to be cautious in launching new funds. Nevertheless, the LLB Group succeeded in launching six new private label funds and gained 24 new custodian bank mandates. At the end of 2012, the LLB was serving as a custodian bank for 245 funds, and measured against the number of mandates it holds, it is clearly the market leader in Liechtenstein.

Financial intermediaries and external asset managers

The LLB Group is distinguished by its focus on and closeness to clients. This applies in particular to the team of experts who take care of financial intermediaries and external asset managers in Liechtenstein and Switzerland. The expectations of the intermediaries’ end clients in relation to product variety and professionalism in the asset management field have risen. For example, they expect an asset manager to provide them with a return and risk management concept customized to suit their individual investment requirements. This necessitates the employment of asset classes that have a low correlation to each other such as hedge funds, commodities and private equity.

For many years, the LLB has been appreciated as a reliable and professional partner. The close ties between our Financial Intermediaries Organization Unit and the Product Management Department, have created new methods of cooperation in asset management. We ensure that our clients receive the latest market knowledge and that they can implement their investment strategies quickly and efficiently. As part of the new organizational structure implemented in 2012, we set up the Intermediary Banking Department, enabling information flows to be improved even further.

The 25 tax information and double taxation agreements that Liechtenstein has concluded since 2008 mean that basic business conditions and due diligence obligations have tightened substantially. Consequently, we organize and hold know-your-your customer dialogues in support of individual tax discussions; these are recognised by the Liechtenstein Financial Market Authority. In addition, we are now offering to act as partners for small and medium-sized trust companies in asset management. In 2013, we aim to achieve further process optimizations and introduce a scoring model in order to actively manage risk. We shall also improve our client segmentation in an effort to further enhance the quality of our client care.

Asset management

Our Asset Management Organizational Unit provides the asset management for 30 funds as well as for individual portfolios. In 2012, we again invested in broadening and deepening our expertise, as well as supplying knowledge, data and information within the LLB Group. We also refined and enhanced our range of funds, our risk management and our quantitative-value-based analysis model. In 2013, we plan to strengthen our innovativeness. At the same time, we want to maintain our fair pricing policy.

Our concept has proved its worth. Once again in 2012, the LLB’s strategy funds were among the market leaders in a long-term competition comparison. For example, «GELD» the Austrian journal for financial professionals selected the LLB Strategy Yield (EUR) fund for two umbrella fund awards in November 2012. The fund came in first in its category twice, namely over one year, and again over three years. The LLB Bonds Euro Alternative (CHF) fund was placed among the top five in the important «Bonds Global Currencies» category. This rating was awarded by Feri Euro Rating Services AG, one of Europe’s leading rating agencies for the evaluation of investment markets and products. We also received high marks in the «Fuchsbriefe Test 2013» in the categories «Investment Strategy» and «Portfolio Quality» (see chapter «Private Banking»).

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