Strategy
Independence is at the heart of our brand promise
In the cut-throat competition of the German financial services market, our independent consulting approach and clear positioning as a financial and investment adviser for academics and other discerning clients has been vindicated. By focussing on old-age provision, health provision and wealth management, we concentrate on those markets in Germany for which experts are predicting long-term growth. Our goal here is to achieve greater growth than the market as a whole. And should the market not offer any growth in the short term, as was the case in the last financial year due to the financial market crisis, we aim at least to expand our market share. Our objective is to grow organically. However, we assume that the German financial services market will see consolidation over the next few years. We are keen to play an active part in this consolidation through acquisitions, assuming that the respective acquisition goals fit in with our business model.
Holistic consulting spectrum
Acquisitions strengthen core competencies and sales force
Last year we made an acquisition in the field of occupational pension provision, by taking over TPC-Group GmbH. This company specialises in occupational pension provision concepts, fits in perfectly with our portfolio of services and with its clients increases MLP’s market share in the field of occupational pension provision.
To strengthen our sales force in the German market, in October 2008 we announced our acquisition of the independent finance broker ZSH, an acquisition which was completed at the start of 2009. ZSH has around 80 consultants who look after some 50,000 wealthy private clients as well as physicians and dentists in all questions of old-age provision and financial planning. In the last three years, ZSH has achieved annual revenues of between € 14 and € 16 million. MLP paid the purchase price of around € 11.3 million from cash holdings. Added to this is a variable purchase price component, which is based on the economic success of ZSH up to March 31, 2009 and which amounts to around € 0.6 million.
We already acquired a majority holding in Feri Finance AG in 2006.
Within the scope of our focus on growth markets, in future we will concentrate our consumer business on our core market of Germany. For this reason, we have been looking for new owners to take over the entity in Austria since the fourth quarter of 2008, and in the Netherlands since the beginning of 2009.
Capital increase to strengthen our position for active participation in industry consolidation
With approval of the Supervisory Board on August 21, 2008, the MLP Executive Board decided to issue 9,799,152 new shares from authorised capital for cash contributions to the tune of € 123.8 million. Under the exclusion of subscription rights, the new shares were issued in an accelerated procedure to Allianz Lebensversicherung AG (46 %), AXA Lebensversicherung AG (46 %) and Uberior Ena Ltd. (8 %), a company of the British HBOS Group. The resulting inflow of cash will significantly strengthen our position and help us actively participate in the current consolidation of the financial services sector. With this joint step of MLP and key product partners, we will also permanently secure our business model as an independent consulting firm.
On August 14, 2008, the insurance group Swiss Life announced its intention to acquire around 27 % of shares in MLP. After Swiss Life had acquired the shares, we informed our clients (as stipulated by law) of this share acquisition and ceased active brokering of oldage provision products from the Swiss Life Group. The independence of product providers is an elementary constituent of MLP’s business model which adds decisive added value for clients, consultants and shareholders. As an independent broker, MLP lays down clearly defined quality criteria that meet the individual requirements of the MLP target group before inclusion of products in its portfolio and their selection in the consulting process.
Sound wealth management with Feri
To get closer to our growth goal in the field of wealth management, over the last few years we have expanded our competence in investment consulting in a targeted manner. Wealth management is today a core competency of MLP. We are striving to attain further market shares and generate profitable growth in the field of wealth management. The cooperation with the renowned Feri Finance AG has granted our clients access to professional wealth management services in the MLP Group. Together with the wealth management specialist we developed tailor-made products for MLP clients in 2007 and have been offering these throughout the whole of Germany since last year. As such, we have created considerable added value for our clients and for our company in the field of wealth management and significantly improved our market position.
For many years Feri has stood for long-term ratings quality and high-grade research in the field of financial investment in Germany and other parts of the world, as well as for investment consulting building on these strengths. The company’s specialists scour the world of investment opportunities with a critical eye, hold regular meetings with portfolio managers, compare their results and thereby achieve maximum transparency for their clients in the field of investment consulting as the basis for reaching investment decisions.
MLP is the leading independent investment adviser in Germany
The proportion of wealthy clients in MLP’s client base is growing. In 2008 around 40 % of MLP clients were in the 40+ age group. MLP has grown with its clients. Many of the academics that our consultants won as clients during their studies are now in top positions. They have long since become members of the 40+ target group and have a keen interest in wealth management concepts. MLP reacted quickly and also brought its services to a high level in this field. We hold a full banking licence and, together with the MLP Group company Feri Finance AG, manage assets of around € 11.4 billion.
Feri looks after more than 1,000 institutional clients and 220 wealthy families, each of which has wealth of at least € 5 million. While the entire wealth management sector struggled with a loss of trust in the client-consultant relationship in the course of the financial crisis in 2008, which in some cases led to termination of wealth management mandates, Feri was able to increase the number of its mandates last year. This makes MLP the leading independent investment adviser in Germany.
The growth market of occupational pension provision
Occupational pension provision is a long-term growth driver in MLP’s value added chain. We use this segment to tap new client groups and diverse cross-selling approaches. Last year we generated 8 % of new business in the field of old-age provision from occupational pensions.
In 2008, MLP took the strategic decision to expand its occupational pension business segment. To this end, we acquired all voting rights in TPC-Group GmbH, Hamburg, a renowned corporate group that specialises in company and private old-age pensions. As a nationwide German specialist in innovative concepts of occupational pension provision, MLP is therefore in a position to set new standards in consulting for both employers and employees. Alongside our established fields, we now also have consulting focuses in the fields of provision solutions for leading trade associations and future concepts such as lifetime working accounts. Many new association and corporate clients have already been won in 2008.