Transition management lowers costs and risks

 


Significant reduction in restructuring costs possible through efficient advice
 

Transition Management is the term used in the investment industry for cost-efficiently and systematically planning, coordinating and implementating portfolio restructurings. There can be a variety of reasons for restructuring a portfolio: Changes in asset allocation, formation of a segment fund, a change in asset manager, a new benchmark, a different investment trust or custodian bank or a merger of funds.

There are two distinct drawbacks to the traditional way of restructuring a portfolio by a portfolio manager: First, the performance measurement usually has to be suspended and second, an asset manager's core task is to generate alpha or maintain the tracking errors. When portfolios are being restructured, however, the focus is on managing the transaction costs and risks in the course of the transition.


Professional Transition Management promises greater efficiency and transparency

UI-Transition Management Solution therefore focuses on lowering the costs and risks in the course of restructuring a portfolio. Transition Management demonstrably saves the investor costs, and the asset manager equally profits from receiving the portfolio of his choice after completion of the transition so that he can directly continue with or commence the asset management without a disruption in performance. As professional interim managers, specialized transition managers ensure that the changes are effected smoothly when it comes to:
 
Identifying the stocks which are to be contained in both the "old" and the "new" portfolio (cross possibilities)
Reducing the costs by merging the transactions of this restructuring together with their own transactions
Preparing detailed reports on the transition with a transparent record of costs and market influences


Added value thanks to UI-Transition Management Solution

Selection processes in the field of transition management entail a great deal of work. Finding the right transition manager from a large pool of suppliers requires a great deal of experience as the suppliers have to be continuously monitored and checked. What is more, each individual portfolio requires a different model approach. In other words: Not every transition manager is the right partner for all regroupings. The investor benefits in two respects: All costs are shown transparently and Universal-Investment also receives attractive conditions thanks to the frequent number of transitions. Universal-Investment represents the client's interests when dealing with all the parties concerned.  UI-Transition Management Solution also provides support in the operational implementation. This includes the areas of developing and realizing the trading strategy, market conformity check and cash management. Once the transition has been completed the post trade analysis takes place which shows the costs of the transaction and contains a detailed review of the restructuring.

UI-Transition Management Solution is lucrative for all institutional investors. Universal-Investment offers UI-Transition Management Solution. Advisory mandates, in particular for other investment trusts, are managed by Universal-Investment-Luxembourg S.A. via the Frankfurt branch of Universal-Investment-Luxembourg S.A.

To assist our clients and strategic partners, we have set up specialised teams who will be introducing themselves here.
 
You would like to find out more about risk management such as rule based investment strategies in asset management, passive index mandates, guaranteed value concepts or currency overlays?
 

For information only and without responsibility. © Universal Investment