GERMANY – BHW Invest, an administrator of institutional funds launched in 2002, has disappeared from the market as a result of its recent takeover by BHF-Bank, a German private bank.
BHF-Bank has confirmed that BHW Invest was merged with another fund administration platform it owns to form the new Frankfurter Service Kapitalanlage-Gesellschaft mbH (FSK).
As part of the merger, FSK is taking over €3bn in assets that BHW Invest administrated, €2.2bn of which is from institutional clients, including pension funds. A spokesman for FSK said the new entity had a total of €25bn in assets under administration, 40% of which came from pension funds.
The spokesman also said FSK had no plans to offer so-called “master funds”, which BHW Invest previously sought to specialise in. Master funds consolidate back-office administration of institutional funds – for example, reporting – to reduce costs and boost transparency for the investor.
BHW Invest’s disappearance marks the demise of another master fund provider on the German institutional market. Last month, US bank JP Morgan confirmed to IPE that it would be shutting down its master fund operation in Germany after launching it in September 2003. Both houses failed to generate €10bn with master funds, which experts say is the threshold for viability of the business.
Meanwhile, the fate of BHW Invest managing directors Hans-Jürgen Dannheisig and Ulrich Kaffarnik remains uncertain.
The FSK spokesman said they would remain “nominally affiliated” with the new entity until the end of March. “After then, I suspect that they will leave the company, but that is just speculation on my part,” he told IPE.
Separately, Frankfurt-Trust, the asset management arm of private bank BHF-Bank, says its institutional business was hit by €329m in outflows last year owing to the loss of a “big institutional mandate”.
As a result of the mandate loss, details of which were not disclosed, Frankfurt-Trust’s assets under management (AUM) were unchanged at €4.8bn at the end of 2005.
But Karl Stäcker, chief executive of Frankfurt-Trust, said the institutional business had gotten off to a good start in 2006 with €1bn in inflows for January and February. Total AUM at Frankfurt-Trust at the end of 2005 was €11.9bn, €5.5bn of which was invested in investment funds.