#34 Daniel Knoblach - Super Global - Custom Indexes: A New Frontier in Investment Innovation

The Nalu Finance Podcast

In this episode of Nalu Finance, we sit down with Daniel Knoblach, Managing Director of Super Global, to explore the growing world of custom index investing.

Daniel dives deep into the benefits and structure of custom indices, including:

• Why custom indices offer a tailored alternative to traditional benchmarks

• How personalization enhances alignment with investor goals, values, and risk profiles

• The key steps in developing, setting up, and implementing a custom index

• Why most assets still follow legacy indices—and how that is beginning to shift

  
  

He also shares insights from structuring over €3 billion in tailored investment vehicles across AIFs and AMCs.

🎧 Listen Now On: Apple Podcasts | Spotify | Youtube | Podomatic

🎙️ Transcript:

Stefan Wagner: 00:44 I am here with Daniel Knoblach, managing partner of Super Global. Thank you, Daniel, for having me here today. Let's jump right in. And, you know, Daniel, who are your typical clients? What do you do and how do you help them?

Daniel Knoblach: 01:01 Sure. Thank you, Stefan, for having me. Yeah, Super global is a saucerization and fund provider in Germany and Luxembourg. And we work with a wide range of institutional clients. There are no typical clients, but often we work with external asset managers, family offices and pension funds. We launch and we set up and administrate funds as well as saucerization vehicles and have offices in Germany and in Luxembourg.

Stefan Wagner: 01:34 What type of products are you supporting? Can you give maybe a couple of examples of, you know, funds and aims? Securitization is a high level.

Daniel Knoblach: 01:43 What is… Yeah, that's true. We have funds in Germany, traditional funds, bond funds, but also very specialized tailor-made funds, for example, for family offices. And in Luxembourg, we provide all kinds of saucerization solutions. For example, we have green bonds, crypto AMCs, and also index AMCs, which are very exciting at the moment. There's a very high demand on AMCs in particular. And perhaps I will explain in a few sentences what AMCs are. Yes, please. AMCs are depositable security, so an investor can purchase it via their depository bank. And the issuance proceeds can be used to manage the active strategy of the external asset manager. It makes it much more easier for the asset managers to handle their portfolio and their customer administrative and compliance advantages for them are very, very big.

Stefan Wagner: 02:52 And if you compare, for example, the AMCs or the securitization you're using there versus sort of a fund, is there a difference in cost, time to market?

Daniel Knoblach: 03:02 Yes, it is. Funds, of course, funds are a little bit more expensive in the setup and the time to market is with AMCs faster. Nevertheless, funds are not that expensive as most people think. That's very important to mention, because often people think I can use a fund only when I have hundreds of millions. That's not true.

Stefan Wagner: 03:31 But maybe to clarify this, we're talking about AIF funds, not usage funds. Yes, that's also a wide range of differences in funds.

Daniel Knoblach: 03:39 Yes, correct. Thank you. Our products are only for professional investors. That's very important to mention. It's true. Thank you.

Stefan Wagner: 03:46 Okay. Now on the AMC side, you know, you mentioned, we talked about it earlier, you know, index linked AMCs. Yes. What is an AMC or index linked AMC or AIF? I believe both are possible.

Daniel Knoblach: 04:01 Yes, it's true. Both are possible. You can structure either an AIF or AMC that follows an index. It makes things easier for asset managers to design their own index. and they don't have to do all the research every day. They can design the index to their requirements and the AMC or the AIF can automatically follow the index. There are big advantages in regards to compliance. And of course, not everybody has a research team with 100 people. And the index composition has a lot of advantages in this specific case.

Stefan Wagner: 04:44 And the index ensures whatever day or whatever has happened anywhere else in your life, it gets executed. It's done.

Daniel Knoblach: 04:52 Yes, yes, yes, yes, true. At the beginning, you design an index, it reflects 100% your requirements. You can define the universe, you can define the methodology of the index, should it rebalance weekly, monthly, everything, almost everything. And the AMC or the AAF will track the index, and all the execution is done automatically.

Stefan Wagner: 05:18 Now, there's many reasons why potentially it makes sense to design your own index, because what we're talking about here is not doing AMC that is linked to the Euro Stoxx or the FTSE, but to an index that you as an asset manager or investor have designed yourself. What are sort of the main advantages of doing this in with your designing your own one?

Daniel Knoblach: 05:40 You have your own name on the index. So it's an advantage for your customer and for your brand.

Stefan Wagner: 05:47 So you keep the IP and the brand for it? Correct.

Daniel Knoblach: 05:50 The intellectual property doesn't leave you. Of course, you can implement all your criteria you want to have in the index. You can also do a back testing at the beginning of the index. You can choose between the universe, the mythology, between everything. And at the end, there's a rule-based index, but it has all the requirements you need for your particular situation or for your particular investors.

Stefan Wagner: 06:23 So how best does somebody go about actually designing an index? You know, it's not going to be as one of the ones I mentioned earlier, who are just capital weighted and, and pick the top 50 stocks. That's, you know, there's way more, there's way more you can do with this with the offering that you have.

Daniel Knoblach: 06:41 Yes, this is true. For example, there are a lot of indices we see which are ESG driven, they are currently being established, and they have a lot of sustainability criteria in it. So, for example, you have the investment universe of the U.S. market and you add the ISG criteria you like and, for example, a few other parameters such as market capitalization. And then, in the end, you have an ESG-driven U.S. market index that perfectly fits into the requirements of your investor.

Stefan Wagner: 07:19 You mentioned earlier that you can do a backtesting. Why is that important in a sense?

Daniel Knoblach: 07:26 What do you achieve with backtesting? For many reasons. Mainly, of course, to find out how a certain strategy would have worked in the past. Then there are other risk management and comparative modeling reasons. But often data is expensive and difficult to get. But this is different with our index solution. Our customers have the possibility to backtest the index when they create it directly in our software and implement it directly into their specific index. Yes, correct.

Stefan Wagner: 08:03 I mean, it's a good way to basically test things for certain scenarios, you know, how did it pay from 2008, how did it pay during COVID crisis, and you can basically test and to a certain extent stress your strategy. Is there, maybe you can give us maybe one or two examples for a client application of an investment product that's linked to your own index? You mentioned ESG, is there other ones that come to mind?

Daniel Knoblach: 08:29 Yes, there are industry or sector driven indices. At the moment, we see them often. And for some external asset managers, it's difficult to oversee every branch or every sector. And with an index, you can have an investment universe in a specific sector, but don't need to have the research of our whole team. And you can allocate your investor into this index and give them the chance to participate on a certain branch, which is very, very attractive for them.

Stefan Wagner: 09:06 So you also said earlier that you keep the IP and you can name the index of it. That means you can basically build a track record that is published.

Daniel Knoblach: 09:17 Yes, it's your own index. The index can be published and the AMC as well. We can also list the AMC on a stock market exchange. It can have a Bloomberg ticker. So the track record is visible and the AMC also will be audited. And the AIF, of course, as well by a Luxembourg or by a German auditor.

Stefan Wagner: 09:39 And the index is calculated by an independent calculation agent.

Daniel Knoblach: 09:43 Yes, yes. They are EU benchmark regulated. In my opinion, for an investor, it's a perfect setup. You have a regulated entity, but a very cost effective setup for an index, which is automatically executed.

Stefan Wagner: 09:59 Yeah. Can you also say outright, you know, I want to exclude, I don't know, UBS stocks, because I'm already way overexposed to UBS, because I've too many shares. So you can not only customize it, you can also personalize it.

Daniel Knoblach: 10:14 Yes, you can exclude every stock or every universe. You can even exclude low market capitalization, for example. There are almost no limits to personalize an index.

Stefan Wagner: 10:30 Now, if you own the index, can you also can also be licensed by third parties if they wanted to?

Daniel Knoblach: 10:37 Yes, this is possible. As the IP stays with you, you can make it available to other external asset managers or to other investors and gain money.

Stefan Wagner: 10:48 So you get basically paid for your IP. That's good. Now, you have been in the sort of securitization business for asset managers for quite a while. What kind of trends do you see these days?

Daniel Knoblach: 11:02 Certainly the demand for automatization. This also let us develop the index idea. because you have a lot of more regulatory obligations and often a limited number of research people or not that big team as banks have. It makes sense to outsource some processes and cover certain sectors or asset classes automatically with an index.

Stefan Wagner: 11:30 I mean, basically, it's your IP, it's your investment logic. but all the time-consuming part of the regulatory side and the execution, NAV calculation, fee deduction, everything else is taken care of by you.

Daniel Knoblach: 11:46 Exactly. The index is designed by our client, but everything else, the implementation, the setup, the regulatory work, the NAV calculation, as you said, even the execution is done by us. And the investor has a depositable security in their depots. And that's what counts at the end.

Stefan Wagner: 12:10 Yeah, I mean, it's a freely transferable security. Exactly. With a, you know, security ID that that you can purchase, buy and sell. Excellent. Sounds very interesting. I could imagine quite a few people would like to maybe get in contact with you. What's the best way to get in contact with you?

Daniel Knoblach: 12:27 You can write me directly at DK at super-global.lu or simply visit our website. It's super-global.lu and we're always happy to welcome you in our offices in Munich or Luxembourg.

Stefan Wagner: 12:43 Excellent. Thank you. Thanks for having me.