Fidelity posts German institutional outflows
GERMANY – Fidelity Investments’ ambitions for the German institutional market have been dealt a blow after its fund business in this segment had slight outflows in 2005.
Klaus Mössle, head of Fidelity’s institutional business in Germany, said the outflows – which he did not quantify – were due to the loss of one mandate. He did not name the client, but said Fidelity still had 19 institutional mandates, 85% of which were German pension funds.
Fidelity’s institutional fund volume totalled €1.5bn at the end of 2005, up €120m from the total a year earlier. The slightly higher volume was solely the result of gains in market value.
A year ago, Fidelity launched a German investment company, called a KAG, enabling it to create and administrate German-domiciled funds for institutional and retail investors.
Mössle told IPE at the time that he new KAG would be of considerable help in the asset manager’s efforts to win over a considerable number of midsize institutional clients in Germany. Mössle, a well-known figure in the institutional market who spent years at Deutsche Asset Management, was recruited by Fidelity in the summer of 2004 to spearhead those efforts.
Soon after he joined Fidelity, Mössle said his goal was to expand its institutional business in Germany by 20-30% annually.
“Sure there was stagnation on the institutional side in 2005, but you have to understand that this is a long-term project,” Mössle told IPE on the sidelines of the firm’s annual news conference in Frankfurt.
Ultimately Fidelity, a specialist in European bond and equity funds, wants its institutional business to make up 40% of its fund volume in Germany. Currently the business accounts for around 10% of the €16bn in total volume.
Mössle has previously said that while Fidelity was competing hard for big German institutional clients, the midsize segment offered “significant growth potential.” He defined that segment as smaller German pension funds, insurers and banks.
The fortunes of Fidelity’s institutional business in Germany last year contrasted sharply with those of its retail business. The US-based firm said its retail funds took in €2.3bn in assets – double the volume of the previous year – bringing total retail fund volume to €14.45bn.