GERMANY - The number of KAGs in Germany remains constant, but the larger ones are getting larger, Kommalpha noted in its latest research on the German fund market.

In its most recent 'Fondsreport', the research company looked at fund managers - or Kapitalanlagesellschaften (KAG) - which, under German law, are eligible for setting up Spezialfonds for institutional investors.

According to Kommalpha, the number of providers has remained constant in recent years and there are no signs of change as yet. But matrix compiled by the firm shows that only a few companies are true market leaders and have strengthened their positions over the last three years.

First and foremost is Pimco, whose success Kommalpha attributed to specialisation in the bond market.

Among the most successful KAGs are Deutsche Bank subsidiaries DWS, DWS SA and db x-trackers.

Kommalpha noted that all these companies have one thing in common - their size.

"The dominance of the large players is the mark of the new structural change, and all those companies have a large number of funds," it said.

Kommalpha also pointed out that those KAGs' success had been driven mainly by inflows into equities and bonds in the US market.

With retail clients increasingly pulling money from funds, the KAGs are left with the institutional clients, which means lower margins.

Kommalpha said it remained to be seen which KAGs would survive this sea change.

"Market consolidation seems a plausible and possible scenario," it said.

For more on Germany's asset managers, see the October issue of IPE magazine.

In other news, Allianz Global Investors (Allianz GI) is to change the name of its KAG, Allianz Global Investors Kapitalanlagegesellschaft, to Allianz Global Investors Europe.

The two units were merged at the beginning of the month and are now running under their new name.

Allianz stressed that the company would remain a KAG under German legal terms.
It said the move was a "further step in the integration of units in Europe and towards further reducing complexity".

A spokesman told IPE that the company, in the coming years, hoped to build a single entity for all of its European operations, which have consisted of as many as 20 subsidiaries.

He added that this meant additional European national operations would be restructured as a subsidiary of Allianz Global Investors Europe.

All European operations are already running under the so-called European Executive Committee headed by James Dilworth.  

Lastly, Universal Investment, with €143bn in assets under management, recently saw a change in ownership as the two main shareholders - Berenberg Bank and Bankhaus Lampe - increased their share to 50% each by purchasing Landesbank Baden Württemberg's 27% share.

The two private banks had already bought out another minority shareholder, Hauck & Aufhäuser Privatbankiers, in April.

In the wake of the financial crisis, many Germany regional banks received state or EU help and in turn were forced to downsize their non-core operations. For the LBBW, this also meant selling its real estate portfolio.

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