INVL Asset Management, part of the Invalda Group and one of Lithuania’s biggest asset management companies, has been given the green light by Bank of Lithuania to merge six of its seven recently acquired MP Pension Funds Baltic and Finasta second-pillar funds.
According to Invalda, following the acquisitions, the investment strategies and risk levels of a number of the companies were identical.
The merger, preceded by a rebranding of five of the six funds into the INVL name, is due to be completed by the end of 2015.
The new merged funds will be known as INVL STABILO II 58+ (the two former conservative, bond funds), INVL MEDIO II 47+ (medium equity) and INVL EXTREMO II 16+ (high equity).
The numbers have been added to indicate the recommended age profile of the respective funds.
Finasta’s low-equity fund is not part of the merger but will be renamed INVL MEZZO II 53+.
The merger will shrink the number of second-pillar operators to six, with INVL in fifth place.
According to Bank of Lithuania’s end-June data, of the 26 second-pillar funds, the MP plans had a 5.5% share (64,722) of the total membership and 5.4% (€109.5m) of assets.
The respective figures for Finasta were 3.3% (39,100) and 3.5% (€67.6m).
On the day of the merger, the accumulated assets of the funds’ participants will be converted, free of charge, into units of the new entities.
According to Invalda, each member’s accumulated fund value will remain unchanged, although their number of units may change as a result of each current fund’s different values.
Finasta and MP’s two former third-pillar funds are not being merged, but the four will likewise be renamed as INVL plans.
INVL entered the Lithuanian pension market in September 2014 when it acquired three second-pillar and two third-pillar funds from Iceland’s MP Banki.
In December, it acquired a 100% stake in Finasta Asset Management, including four second-pillar and three third-pillar funds, following up the next month with Finasta’s Latvian asset management operations.
That acquisition marked Finasta’s return to Invalda, which in 2009 sold the company to Bank Snoras.
Finasta, as a separate legal entity, was unaffected by Bank Snoras’s nationalisation by the Lithuanian government two years later and subsequent bankruptcy.