AUSTRIA/GLOBAL - Asset management boutiques might profit from the collapse of large asset management companies in current market conditions as good managers will be in need of new jobs, according to Christian Böhm, head of Austrian Pensionskasse APK.
"We will be checking our portfolio closely to see which mandates we awarded because of the managers and whether that manager is still with the company," Böhm explained.
He suggested good managers at troubled institutions will be looking for new jobs and could be turning to well-positioned boutiques.
Böhm stressed the APK had very little or no direct exposure to troubled financial institutions, as most of its investments are made via passive mandates.
He confirmed the Austrian supervisory body FMA has been questioning all Pensionskassen on their exposure to four troubled financial groups.
"But direct exposure is not really the problem; the problem is the counterparty risk which is much more difficult to deal with," he explained.
Böhm is convinced with the help of the US financial aid package, which is currently being debated in the US Congress, the crisis will eventually be overcome although the markets will remain volatile.
"Fact is that, overall, the US stock market has suffered less during the crisis as there are more institutional investors involved and they did not panic," the APK head claimed.
"If all pension funds worldwide sold their equity holdings then we would really be in trouble," he added, referring to demands made by Pensionskassen critics in Austria.
Looking at his own fund, Böhm confirmed new money - allocated prior to the crisis - was mostly placed in money market instruments while bond exposure was gradually shifted away from financial corporates to government bonds.
"No sales were made in panic," Böhm stressed.
He confirmed the APK outperformed its own benchmarks as well as other market participants in the first half of 2008 by "more than 0.5 percentage points".