Languages can build bridges, but languages can also disconnect: a realization which all too often holds true in the area of asset management. Professional journals, the press, and subject matter experts in general do not always speak the type of language needed for the desired target group. Many foundations have investment needs, attend appropriate events and conferences, and seek the exchange with industry experts. Private asset managers can be great mentors and product suppliers for foundations—but why do both parties often have difficulties to form long-term partnerships?

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Foundations, Asset Managers, and the King’s Children
By Markus Hill, Independent Asset Management Consultant
(Published only in German, www.finanzen.net)
Languages can build bridges, but languages can also disconnect: a realization which all too often
holds true in the area of asset management. Professional journals, the press, and subject matter experts
in general do not always speak the type of language needed for the desired target group. Many
foundations have investment needs, attend appropriate events and conferences, and seek the exchange
with industry experts. Private asset managers can be great mentors and product suppliers for
foundations—but why do both parties often have difficulties to form long-term partnerships?
Communication Level—Interests and Long-term Character
Foundations and asset managers should generally think long term. Foundations should do so to meet
their foundation’s objective and asset managers may do so because he or she follows a entrepreneurial
vision or is accountable to a person/organization. Owner-run businesses typically do not think in
terms of quarters. Yet, similar interests do not necessarily mean that foundations ought to delegate all
possible problems in terms of asset management to the asset manager without further consideration
(e.g., “beauty contests,” interviews, etc.). Just like in the field of consulting, asset managers must be a
good fit for their clients (foundations). Especially for smaller foundations (with assets of 0.5 Mio.
Euro and up), investing in so-called asset managing approaches in form of public funds is a good
option. Transparency of approach and performance are present and can be deciding factors next to the
so-called soft factors. Product transparency of public funds is a good requirement for bringing
consultant, client, and product together.
Possible “Soft” Criteria for Asset Manager Selection
Particularly small to medium-sized foundations have an interest in individual, tailor-made consulting.
The seed of dissatisfaction with the current type of consulting in the area of banking can be caused by
the fact that low-cost or cost-neutral consulting of drafting a foundation does not necessarily match its
delivery of “excited” performance in asset management. It remains to be seen whether investment
consultants always select the right investment product. It is desirable though that he or she is offered
the right—and for the foundation’s purpose suitable—products. Direct feedback from foundations,
however, suggest that this too is an area with great potential to improve.
It takes time to find the best asset manager. Three simple questions asked by the foundation and
addressed to the asset manager can be particularly useful during a first interview:
a) Is he or she also interested in managing “smaller” sums?
b) Does he or she listen rather than immediately present a product?
c) Is he or she interested in the foundation’s projects and application of funds?
Interest, Understanding, and Added Value of Asset Managers
The investment volumes of foundations represent a critical factor for the consulting quality. Asset
managers as well as financial institutions must think economical. The reality that many providers
offer standard solutions is therefore understandable. This, nevertheless, must not bypass the needs of

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small and medium-sized foundations. What shouldn’t happen, however, is the continuous
bombardment of the foundation’s investment staff with large numbers of product suggestions which
may turn out to be inappropriate. Here, less is often more. Examination of the foundation’s goals, the
topic of payout, and perhaps even the subject of sponsorship can open up an interesting dialog
between the asset manager and the foundation. Some independent consultants even offer direct and
indirect support for sponsor acquisition—a real added value compared to basic product sales.
Information: Investment Firms, Associations, and “Networks”
To be courted by numerous product providers in the middle of a foundation event does have its
advantages—or simply result in a random selection of a consultant. First pointers for the identification
of asset managers for “smaller” foundation assets can be investment companies like Universal
Investment, IP Concepts or AmpegaGerling. Another good option to gain a first overview of
consultants is also the Association of Independent Asset Managers Germany (Verband unabhängiger
Vermögensverwalter Deutschland e.V.), as well as with independent journalists, consultants, and a
number of other market participants who are seeking the subject-specific dialog with asset managers.
An exchange of ideas that is not guided by sales can often lead to interesting insights.
Conclusion
“Small” foundations are interested in the Know-How and consulting of independent asset managers.
Perhaps, the above mentioned statements and thoughts can lead to a sort of long-term optimized
decision-making process so that one doesn’t have to say, “They were the king’s children; they didn’t
find common ground.”
Feedback, additional thoughts, experience or any kind of dialogue on such context is most welcome;
please contact info@markus-hill.com or Mary Daute (Asst. Manager). Phone: + 49 17 66 33 66 094
Markus Hill
Markus Hill (MSc in Economics) is an independent asset management consultant based in Frankfurt, Germany
Professional experience includes SEB Bank and Credit Suisse Asset Management. In addition, he worked as
head of sales and PR for a German fund boutique. Since 2005 he specialized in the management of mandates,
sales, marketing, and PR (consulting, "introducing"). Markus is also involved in selecting themes in the
specialist areas of target funds with a multi-management aspect, fund boutiques and mutual funds for
institutional investors (product scouting, fund selection). Furthermore he is actively engaged in cooperation with
the market-leading Private Label Funds/Master KAG in Germany (Universal-Investment) promoting the idea of
independent asset management and was the Co-Initiator of the first all-German Consultant survey in 2005 and
the first "UCITS-survey" in 2003. Market entry into Germany, behavior of fund selectors and fund providers in
German asset management industry are often discussed by him, e.g. in his asset-management-publication MH-
Focus. Through many articles, columns and presentations (national and international) he has become a highly
recognized expert in the German asset management industry. "Industry multiplier" is a term often used by
journalists and clients to describe his style and personality.
(Markus Hill/ MH Services assigned in the role of Media Partner for: UCITS Alternatives Conference in
Zürich, September 2011)
Markus Hill MH Services
email: info@markus-hill.com
website: www.markus-hill.com
phone: 0049 (0) 69 280 714 mobile: 0049 (0) 163 4616 179