The Munich-based Siemens KAG, which manages the pensions and other investments of the Siemens group, has asked Morgan Stanley to undertake an asset liability study.

Herbert Lohneiss, managing director of the KAG, says: It is a very traditional asset liability study. It will concentrate first on getting a reading of the likely future development of the liabilities, both in terms of size and cost." The study will also look at the assets to determine the optimum structure, so that the returns would be sufficient to cover the liabilities. It covers DM15bn ($8.5bn) of the pensions assets managed by the KAG.

"Morgan Stanley is assisting us in this process to help us determine the structure on both sides," he says. "They have several models which help to link it together." The study has been in progress for a number of months. "So it should not take that much longer."

Lohneiss regards the move as a check on the existing investment policy. "If we think that changes are necessary as a result of the findings, we will act accordingly." He emphasised that the study did not mean Morgan Stanley was becoming more involv-ed either on the investment management or custody side for the KAG."

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