GERMANY – Watson Wyatt has confirmed that it and rival consulting firm FERI are both vying to advise energy giant E.ON on the creation of an external fund for up to €5.4bn in pension liabilities.
FERI, a leading German investment consultant, is the current incumbent at E.ON. Prior to his departure from FERI, Torsten Köpke was the manager who handled the E.ON account.
As first reported by IPE, Köpke left FERI in late May to head up Watson Wyatt’s new investment consulting office in Frankfurt that will open its doors on December 1.
Nearly three months later, E.ON said it would remove up to €5.4bn in pension liabilities from its balance sheet and finance them via a contractural trust agreement (CTA).
E.ON, listed on Germany’s Dax-30 equity index, decided to opt for a CTA because it wanted to improve its transparency with investors and rating agencies.
Thanks to his past links with E.ON, Watson Wyatt said Köpke had succeeded in enabling it to compete alongside FERI for the CTA advisory mandate – one of the biggest ever in the German market.
A decision on who will win the mandate is expected in the new few weeks, as E.ON intends to construct the CTA from January 2006.
People with knowledge of the situation added that, currently, no other German-based consultant was being considered, although Mercer had approached E.ON.