DG Bank is forming a joint venture with PanAgora Asset Management (PA) to exploit the future German pensions market. This will be a new Kag investment management company to run Spezialfonds for institutional clients.
Karleugen Reis, director of DG in Frankfurt says: We are aiming to target the new emerging market for pension schemes, which will be on a capital funded basis."
The tie-up with PA is to use the London and Boston-based manager's know-how in structured portfolios. Reis says: "We want to offer to this market expertise in equities, in global investing, and to offer a style that is different to other German funds' traditional judgmental approach." The group wanted to be among the first with a "structured, more quantitatively-based fundamental style as PA has".
Reis reckons there are institutions currently looking for such expertise, but this will increase when the capital market pension funding happens. "But if you wait until the legal changes are in place, it is too late!"
At PA London's office, chief operating officer, Colin McLatchie has welcomed the venture and the opportunity to access DG's network, which will focus on Austria Switzerland and Eastern Europe. There will be close co-operation in running the venture, including ex-changes of staff. "We have been talking to DG since 1996."
DG is the central credit body of the German co-operative organisation. It has assets of DM360bn ($195bn)."