Union FinancièRe De France Banque Sa Business Information, Profile, and History

Company Perspectives:

Our activity: Giving everyone access to wealth. Union Financière de France has loyally followed its calling for the last 34 years: to provide as many people as possible with the service normally reserved to the wealthiest people. To achieve success in this, we rely on our highly trained and experienced team of financial advisors who provide customised advice to our prospective clients in the comfort of their own homes. And so begins a long relationship of trust between our clients and their advisors: from the definition of the client's wealth objectives, deciding on a medium or long term strategy, to regular advice throughout the creation and management of the client's wealth. Our investment recommendations are based on collective products, which include both access to the financial skills of the very best asset managers and diversification of risk. We have created our own range of collective products under the exclusive brand name "Union Financière de France" and we entrust the management of these financial products to asset managers selected by tender. Our financial advisors are at the full disposal of their clients: meeting them at least twice a year and at any other time the client may wish it. We believe that if our clients have placed their money with Union Financière de France, then they have also placed their trust.

History of Union Financière De France Banque Sa

Union Financière de France Banque SA (UFF Banque) is an asset manager with a difference. The company has developed an innovative approach toward investment and wealth creation, targeting individuals--and particularly those with small- and medium-sized portfolios, rather than the wealthy--with two core investment products: the Personal Investment Plan (PIP), which enables a client to build up his portfolio through regular installments; and the Investment Account, which provides for the management of existing assets. Each product group offers a variety of collective investment vehicles, ranging from securities-based unit trusts to mutual funds and life insurance, to real estate portfolios and the management of a portfolio of rental properties. UFF Banque boasts more than 140,000 clients, some 89 percent of which are private individuals. Of these, nearly 50 percent have an average age of 54, with average assets of EUR 34,000; another 41 percent are in their mid-40s with assets of EUR 11,000; and the remainder are in their 60s with an average asset portfolio of EUR 214,000.

The majority of UFF Banque's customers are from the French provinces outside of Paris, served by a network of more than 30 branch offices and a commercially oriented network of nearly 1,000 advisors. In addition to its individual clients, UFF Banque has also attracted a number of corporate clients, particularly for its pension fund and similar products. The company has also been actively seeking wealthier clients, by rolling out new investment products and through a tongue-in-cheek advertising campaign launched in 2000 featuring such anticapitalists as Mao Tse-tung and Karl Marx. The successful campaign helped the company average some 11,000 new clients per year at the turn of the millennium, with total assets managed rising to EUR 5.5 billion, generating EUR 167 million in commissions and profits of more than EUR 33 million in 2001. UFF Banque is listed on the Paris Stock Exchange, trading on the secondary market; the majority of the company's shares are held, however, by French insurer Abeille Vie, itself a subsidiary of Aviva (formerly CGU).

Assets Management with a Difference in the 1960s

The French social upheaval of 1968 had a lasting impact on that country--touching its traditionally conservative banking industry and particularly the sector devoted to assets management, long the exclusive domain of the wealthy. At the end of the 1960s a number of people began to challenge the notion that only the rich should have access to assets management professionals. One of these was Guy Charloux, who in 1968 set up Diffusion Immobilier. Backed by the powerful French financial institutions Union des Mines and especially Banque de Suez, which was to remain a majority shareholder of the company into the 1990s, Diffusion Immobilier set out to offer assets management services to individuals--even those with modest portfolios.

Charloux's idea was to create a new type of savings bank, specializing in "wealth creation." Rather than offering individual portfolio management, the company sought to establish collective products using the assets of its customers as deposits. A primary difference offered by Diffusion Immobilier was its commercial nature, as the company began building up a network of "conseillers en gestion de patrimoine" (assets management advisors), whose roles were to act as salespeople for the company's products while building a personal relationship with the customer, including visits to the customer in his or her own home. In this way, Charloux sought to lower the entry barrier for the individual customer.

Diffusion Immobilier launched its first product, the Progressive Investment Plan (PIP), in 1968. Presented as an entirely new type of long-term savings plan, PIP enabled customers to build up assets in regular installments. At the same time, PIP gave clients access to the French stock market--which had long remained all but closed to the small-scale investor--by enabling them to buy into a collective stock market product. As its clients began to build their portfolios and the firm attracted new clients, Diffusion Immobilier launched a second product, the Compte d'Investissement (Investment Account, or CI), in 1969. The CI permitted clients to place their existing assets into a management account with access to the firm's products.

Transitions in the 1970s and 1980s

Diffusion Immobilier also began developing new investment products. Real estate and rental property holdings were added in 1973, while the company also added mutual fund investments to its securities portfolio. In 1976 the firm added its Life Assurance Plan with Variable Capital, through a partnership with French insurance company Abeille Vie, which also provided management of the plan.

In 1978 Diffusion Mobilier changed its name to Union Financière de France (UFF), and redefined itself as a financial institution. The firm was not yet officially allowed to call itself a bank, a status acquired only in the late 1980s. Nonetheless, UFF continued to attract new clients for its investment products. In order to generate new business, UFF took a two-pronged approach: the first was to develop a strong commercial staff--by 1980, 164 of the firm's 200 employees were salespeople; the second was a rapid expansion beyond the highly competitive Paris region. Instead UFF targeted the French provinces, largely under-served by the financial investment community. UFF quickly set up a network of branch offices and by 1980 had 13 agencies across France.

In the 1980s, UFF continued to innovate with its product range. The firm introduced two new product groups in 1983, the Real Estate Investment Fund and a life insurance policy offering lump sum payments. Until the mid-1980s, meanwhile, the company's securities investment activity had been as UCITS (Undertakings for Collective Investment in Transferable Securities), a category defined by the European Union to facilitate cross-border investments. In 1985, however, UFF began instituting its first unit trusts, which eventually replaced its UCITS products. By then UFF had seen strong growth, more than tripling its employees and boasting a sales force of over 500. The company moved into new Paris headquarters in 1986.

The UFF sales force highlighted the company's aggressive approach to attracting new clients. Sales personnel were trained by UFF itself in a program lasting several months and featuring both theoretical and practical training, including stints in branch offices. Graduates of the program received the title of Assets Management Advisors. In this way UFF developed a sales force with a variety of personal backgrounds, in what was described as a "melting pot" of personnel.

Creating Wealth in the 1990s

The year 1987 represented a new phase in UFF Banque's evolution as its shareholder base changed. Banque Indosuez, the former Banque de Suez, acquired a majority position in UFF. At the same time, insurance partner Abeille Vie acquired a 10 percent share in the company, while UFF began allowing its employees to acquire shares in the firm for the first time. By the end of the year UFF had gone public, with a listing on the Paris Stock Exchange's Unlisted Securities Market. This listing led the way to UFF's being granted formal bank status. The group changed its name to Union Financière de France Banque (UFF Banque) to highlight its new status in the French financial community. Until then, UFF Banque had focused on developing a client base among individuals, the majority of which maintained small- to mid-sized assets portfolios. In 1987, however, UFF Banque began developing a new range of group retirement savings plans in order to move into the corporate market as well. Meanwhile the investment bank's sales force had continued to grow, topping 1,000 among a network of 18 agencies. An increasing proportion of UFF Banque's operations became dedicated to developing its corporate accounts; nonetheless, UFF Banque maintained its strong service commitment to its individual customers.

In 1988 the 20-year-old UFF Banque launched a number of new innovative products. Newton Avenir Capital Retraite and Newton Avenir Epargne Retraite were assets- and savings-based life insurance policies featuring units of account, making UFF Banque one of the first French investment banks to offer this type of product. The company then debuted its real estate investment fund, UFIFrance Immobilier, which specialized in office building investments in the Paris region.

UFF Banque extended its Newton product range with Newton Avenir Patrimoine in 1991, a multiunit life insurance plan featuring lump sum payments; and Newton Luxembourg, the company's first international product offering, which enabled the development of multiple currency assets while benefiting from Luxembourg's favorable tax climate.

The company continued its growth despite the harsh economic climate of the early 1990s. By 1992, UFF Banque boasted more than FFr 20 billion (worth approximately EUR 3 billion) in managed assets. The bank also featured a new product line, called the Personal Equity Savings Plan. UFF Banque's growth enabled it to place its share on the Paris Bourse's secondary market in 1993. The following year, 1994, UFF Banque targeted another largely under-served market, setting up a special pension product for France's freelance workers under the so-called "Loi Madelin," which was enacted in 1994 to recognize the professional basis of freelance workers' retirement plans and insurance policies. Two years later, UFF Banque expanded its corporate product range with the establishment of a number of cash management vehicles for corporations.

In 1997 UFF Banque found itself with a new majority shareholder when Banque Indosuez sold its holding to Abeille Vie, by then a subsidiary of the United Kingdom's Commercial Union (renamed Aviva in 2002). The change in ownership also brought in Abeille Vie executive Philippe Tizzoni, who took over as UFF Banque's chairman and chief executive. By 1999 the bank's managed assets topped EUR 4.5 billion and it launched another new product, UFF Horizon, an investment account. The company also began preparing to boost its position in the investment market, with a particular interest in attracting a wealthier segment of the investing population. The company hired polling group SOFRES to conduct a survey of its client base. The results heartened UFF Banque, as many of its clients declared themselves highly satisfied with the bank's service. The SOFRES survey was the first step toward a reevaluation of UFF Banque's brand image.

Banking and Investing in the New Century

The company rolled out a new advertising campaign in 2000. Featuring the images of such famed anticapitalists as Karl Marx and Mao Tse-tung, the ad campaign helped the company attract more than 20,000 new clients by the end of 2001. UFF Banque also installed a new IT system in 2001, which included supplying its entire network of advisors with laptop computers to provide them with full access to the company's infrastructure. At the end of the year UFF Banque debuted a new web site as part of its service and promotion effort. The company also planned to roll out another new advertising campaign to continue boosting its clientele--which numbered more than 140,000 clients, including some 16,000 corporate clients.

UFF Banque had remained committed to its record of innovation as it entered the 21st century. By the end of 2001, UFF Banque had created two new business units: UFF Wealth Engineering, and, in order to tap into the growing pool of wealthy professional athletes, UFF Sport Advice. In 2002 the company launched two new savings products and an investment vehicle, UFF Innovation 2, enabling clients to take part in the equity of nonlisted companies. Philippe Tizzoni announced his retirement in 2002 and was replaced by François Lesieur as UFF Banque's chief executive.

Principal Subsidiaries: UFIFrance Patrimoine; UFIFrance Gestion; Segesfi; SNC UFIFrance; UFF International SA (Luxembourg); Newton Gestion Luxembourg SA.

Principal Competitors: Agence Francaise de Developpement; SFCE Sevres Cedex; ISIS SA; Borzo-Bel; Etablissements Maurel et Prom; SEAE; Siparex; Societe Immobiliere d'Epone; Francarep; IPBM; Paris Orleans SA; Societe de Tayninh; Carpinienne de Participations; Societe Centrale d' Investissements; COFISMED; Fauvet Girel Etablissements SA; Group IDI; Initiative et Finance Investissement SA; GIEFCA.

Chronology

• Key Dates:
• 1968: Guy Barloux sets up Diffusion Immobilier with the backing of Banque de Suez and Union des Mines in order to provide assets management services to individuals.
• 1973: Diffusion Immobilier launches its first life insurance products through Abeille Vie.
• 1978: The company changes its name to Union Financière de France (UFF) in order to emphasize its role as a financial services company.
• 1987: UFF acquires bank status and makes a public offering on Paris Stock Exchange's Unlisted Securities Market; Banque Indosuez (formerly Banque de Suez) acquires a majority share of UFF Banque; UFF Banque begins offering corporate investment services.
• 1988: UFF launches its first of range of Newton investment products.
• 1991: Newton Luxembourg, the company's first international investment product, is created.
• 1993: UFF Banque listing is switched to the Paris Bourse's secondary market.
• 1997: Abeille Vie acquires majority shareholding in UFF Banque.
• 2000: UFF Banque rolls out a new advertising campaign to boost its client base, attracting 20,000 new clients over two years.
• 2001: The UFF Banque web site is launched and a new IT infrastructure is rolled out, along with the creation of two new business units, UFF Sports Advice and UFF Wealth Engineering.
• 2002: Two new savings products and a corporate investment product are launched.