GERMANY - Helaba Northern Trust, the asset management venture between German Landesbank Helaba and US bank Northern Trust, has, for the time being, ruled out launching a multi-manager fund for the German institutional market.
Hans-Ulrich Templin, managing director of the Frankfurt-based venture, told IPE that while it offered “multi-manager-like strategies” to institutional investors, there were no current plans to launch a mutual fund that embraces that strategy.
“The simple reason is demand. Our feeling is that German institutional investors want to have closer contact with asset managers than they would get with a multi-manager fund,” said Templin.
German institutional investors typically invest in Spezialfonds, or institutional funds which, beyond tax advantages and a high degree of diversification, provide them with closer links to asset managers. The investment threshold for these funds is generally around €50m, though in some cases it can be as little as €25m.
Templin’s comments follow recent hints from Helaba’s partner Northern Trust that the venture was considering introducing a multi-manager fund to the German institutional market.
Helaba Northern Trust’s reluctance to launch the product is understandable. Since Germany’s multi-manager fund market was born in mid-2003, investor inflows to the products have been tepid.
There are currently four multi-manager fund alliances in Germany, two of which involve Northern Trust’s rivals Russell and SEI. Russell and the German private bank Metzler have so far taken in €200m, while SEI and its partner Commerzbank have only managed €150m.
Last week, Deutsche Asset Management admitted that its multi-manager venture with German consultant RMC would take in far less in assets that it had originally expected. The venture has launched a global equity fund with just €60m in seed money.
Another German multi-manager venture involving Universal Investment, MM-Fonds Consulting and consultant FERI also has struggled to get off the ground since being announced last year.