The Hoechst pension fund, with assets of around DM8bn ($4.3bn), utilises US expertise for the international portion of its equity allocation, which amounts to 15% of the total fund.

As the fund only invests in German bonds and international equities, a non-German manager can only qualify on the latter asset class.

Patrick Roeder head of asset management admits that the US managers in general are very good", but he asserts his current choice is independent of geographical location.

"We try to get the best managers worldwide, independent from country" says Roeder, adding, "It is independent from whether it is a US manager, a UK manager or a French manager. If the manager can offer competitive products then we look at it."

He continues: "It's a very competitive market in the US and what we are looking at in the right people is a competitive investment philosophy and decision making process." Brand names of the organisation are very important, he says, and as a result, he feels the lesser known managers are likely to be overlooked, regardless of their expertise, due to the strong competition from the larger, global players.

"The problem with the US is that you probably have more investment managers than clients and most of them are very unknown here in Germany or even in Eur-ope, so investment managers like JP Morgan or Morgan Stanley have advantages in Europe andthe smaller ones, well maybe they are good, but nobody knows them so it is quite difficult to differentiate."

Furthermore, as the larger pension funds are the only ones in any real position to put out specialist mandates, the market is limited even further for US managers, large or small.

"If you have a Dutch pension fund with a lot of money, it makes sense to specialise and to look at growth managers and value managers. But in smaller pension funds it makes no sense to take a specialised approach and to end up with 20 different managers for DM1bn of management." RO"