GLOBAL – European and Asian pension funds will remain the growth drivers for Allianz Global Investors’ pension business, according to chief executive Joachim Faber.
In an interview with the Börsen Zeitung newspaper, Faber said that of the pension money allocated worldwide, AGI was consistently getting a good share from schemes in Germany, France and Italy.
“But this is equally true of Asia. In Taiwan, we have won big mandates. In Hong Kong, we are one of the top biggest asset managers of the city’s mandatory pension fund. And in Korea, we have in the last few months again won big mandates from the Korean Pension Trust,” Faber said.
According to Faber, AGI also sees great pension potential in China, especially once the government approves the sale of funds targeted at institutional investors. The approval is expected later this year.
Faber added that another factor driving AGI’s business in Asia was the trend toward capital market funding of pensions.
“Capital market funding of pension liabilities is an enduring theme there. If you consider the proportion of workers per pensioner, one sees that Japan, Korea and China are worse off than Germany, Italy and France. Of course, the economies of these countries are in better shape,” he told the newspaper.
Backing up his remarks, Faber noted that Asia accounted for 20% of AGI’s total net inflows during 2005 – compared with 5% in previous years. Europe accounted for 30% and the US 50%.
Faber also said third-party inflows totalled €50bn in the first nine months of 2005. Between 80-90% of this volume was generated by Pimco, AGI’s US-based bond specialist.
All told, fixed income accounts for 70-80% of AGI’s €900bn in assets under management. Around 60% of AGI’s total assets are from institutional clients and 40% from private clients.