GERMANY - Metzler Asset Management has recruited Joachim Treppner from JP Morgan in Frankfurt to head up its master fund business. The appointment is effective from November 1.
Treppner's appointment comes nearly eleven months after the US bank shut down its master fund business in Frankfurt. He joined the business in October 2003, one month after JP Morgan launched it.
Originally, the 45-year-old Treppner was operations chief, reporting to Martina Reichl, the former head of the business. He took charge of it in June 2005 after Reichl left to join Bayern-Invest, another provider of German master funds.
A German master fund permits an institutional investor to centralise back-office administration of his funds - for example reporting and risk monitoring. Claimed benefits for the investor are greater transparency and reduced cost.
While the arrangements are very popular among German institutions, providers must attain a certain threshold for the business to be viable. Since margins range between four and ten basis points, industry experts put that threshold at €10bn.
But JP Morgan's master fund business took in just €4.3bn before the bank pulled the plug on it. Its most prominent client was German insurer R+V Versicherung, which accounted for 40% of the total volume.
JP Morgan continues as one of major global custodians in Germany's institutional market. Others are BNP Paribas, State Street and BHF BNY Securities Services, a joint venture between German private bank BHF and the Bank of New York.
Metzler noted that of its €30bn in total fund volume, €19bn was invested in master fund arrangements, making it one of biggest players in the market.
Other major players include Universal-Investment, the market leader, INKA of HSBC Trinkaus & Burkhardt and Deutsche Asset Management.