"Once the barriers to entry have been overcome, Switzerland offers an excellent environment"

Flavio Lauener
CEO PURE Funds AG

 

Mr. Lauener, PURE Funds AG is still a young fund management company with one real estate fund on the market so far: Are you a late entrant in a market that is already well saturated?

As a young fund management company with a focus on investments in real estate, we recognise the competitive intensity of the market. However, we see the real estate market as attractive and dynamic with continued growth potential and many opportunities. Our approach is to offer differentiated investment strategies and innovative solutions through our in-depth expertise and broad network in the real estate sector. For example, in the second financial year of our PURE Swiss Opportunity REF (PSO), we already succeeded in achieving the highest investment return of all Swiss real estate funds as at the end of 2022, with a result of 13.73%.

What is your personal attraction to the real estate market - and to asset management?

The real estate market and asset management offer a variety of opportunities that fascinate me personally. On the one hand, the real estate sector enables long-term investments in physical assets to generate sustainable returns from stable rental income and potential appreciation. On the other hand, asset management offers the opportunity to analyse, optimise and manage complex portfolios to meet the needs of our investors. The combination of both disciplines, coupled with strategic foresight, sound market analysis and skilful operational implementation, creates maximum added value for our investors.

How do you assess the general conditions in Switzerland for successfully establishing an asset management company in the market?

The entry barriers for establishing an asset management company are high. However, once these are overcome, Switzerland offers an excellent environment for the development of a successful asset management company. The stable political and economic situation, the solid legal system as well as Switzerland's high level of expertise and long-standing tradition for the financial business create a reliable foundation for our activities. In addition, Switzerland has a well-established financial market infrastructure and a large number of institutional and private investors looking for professional investment solutions. Due to the strict regulatory requirements of the Swiss Financial Market Supervisory Authority FINMA, the commitment to transparency, integrity and security of investor funds is very high. In summary, I clearly believe that we have unique framework conditions.

Many fund providers delegate the fund management externally. At PURE Funds AG, it's the other way round: you set up the fund management company first, then the fund. What are the advantages?

As an independent and owner-managed fund management company, we take care of all aspects of fund management, including risk management, the definition of the investment strategy and its operational implementation. We can use our extensive expertise and experience in real estate and asset management in a targeted manner to further develop PSO in accordance with the interests of our investors. Our own fund management also enables us to react flexibly to market developments independently of third parties, to implement investment decisions quickly and to continuously monitor the performance of the PSO.

What are the differentiating features of your fund?

The combination of existing properties with a focus on constant income and a clearly defined investment share in project developments to generate capital gains enables, in our view, an optimal and risk-adjusted investment return. In addition, we attach importance to active asset management of our real estate investments in order to realise potential for value appreciation and to increase the earning power of our real estate portfolio. We also strive for a sustainable return by integrating ESG criteria into our investment decisions. Another success factor is that we acquire properties predominantly off-market and without a bidding process through our broad network of property owners, brokers and project developers. This enables us to purchase properties at better conditions than is the case with other diverse competitors.

You also own a marketing company. Are there any points of contact?

Yes, the marketing company Best Property, which my wife Carmen Lauener runs, has various points of contact with our asset management business. Through our marketing activities we have been able to build up an extensive network of real estate investors, buyers and sellers. This network gives us direct market access to attractive properties, from which our investors have benefited greatly in recent years. In addition, due to the familiarity of the marketing business and the many years of professional cooperation, investors have placed their trust in us and joined our real estate fund at an early stage. With this starting position, we were able to build up the PSO to an investment volume of CHF 100 million by the end of 2022, which was important for gaining access to further large institutional investors. The resulting synergies thus create substantial added value, from which our investors always benefit.

What is the relationship between sustainability and returns in your fund?

Sustainability plays a major role in our investment strategy and is an integral part of our investment decisions, even though our PSO is not a sustainability fund. We aim to acquire properties with high energy efficiency standards, environmentally friendly building materials and positive contributions to the community. We focus on a systematic implementation of ESG measures in order to achieve above-average returns as well as positive environmental and social impacts in the long term. For PSO, the ESG strategy is currently being further developed and will be presented to investors for the first time in a sustainability report as of 31 December 2023. We are convinced that our strategy will make a substantial contribution to the value of our society and environment, from which our investors will also benefit financially in the long term.

What are the goals of PURE Funds AG - and what are your personal goals?

Our goal is to build one of Switzerland's leading asset management companies in the real estate sector with outstanding investment results, well-managed risk management and first-class customer service. We strive for continuous but sustainable growth and plan to expand our product offering to meet the needs of our investors. On a personal level, as CEO of PURE Funds AG, I am pursuing the goal of successfully establishing our company and consolidating our reputation as a trustworthy partner for institutional as well as private investors. I am passionately committed to the real estate and asset management industry by implementing my visions and thus creating added value for our investors as well as making a positive contribution to the reputation of the Swiss financial market.