HVB in major hedge fund push

Germany’s HypoVereinsbank (HVB) is restructuring its hedge fund activities in an effort to step-up its global alternative investments business. The move is intended to capitalise on the boom in demand for alternative investments, such as hedge funds, in the current weak equity climate.

HVB is renaming its Vienna-based unit, Schoeller Capital Management (SCM), as HVB Alternatives, and plans to progressively expand its product range. The unit, already established in product sales to its core markets in Germany, Austria and Switzerland, will now expand into the US, Italy and Spain.

Alexander Schweickhardt, a board member at HVB Alternatives, told RiskNews that increased customer demand from institutional and private companies was the driver behind the restructuring, particularly in view of the sustained difficult situation in the stock market. “When we set up our business in the mid-90s, alternative investments were relatively unknown in Europe,” he said. “Now there is far more accepted use in portfolios.”

HVB is also broadening its investment policy. Up to now, investments in hedge funds were made as part of a fund-of-funds approach that pursued a long/short strategy. HVB will expand this strategy to include a 'targeted multi-style' approach, which allows the implementation of return-orientated and active multi-management decisions.

HVB Alternatives has offices in Munich and Luxembourg, in addition to its headquarters in Vienna. It established an investments team headed by Jeff Landle in New York in April. Schweickhardt told RiskNews that HVB would be looking to set up sales teams in its additional new core markets.

Last year investment volume for alternative products at HVB increased by 76%. Schweickhardt believes customer assets will increase from a current €2 billion to between €4 billion and €5 billion by the end of next year, depending on market conditions.