GERMANY – A mix of mandates for institutional funds and one for a so-called ‘master fund’ has enabled Metzler Asset Management to lift its institutional assets to above €20bn – an increase of 28% from the end of 2004.
Metzler said that since the beginning of 2005, inflows from the mandates totalled €4.4bn, including €1.4bn from the master fund. Of Metzler’s €20bn in institutional assets, 19% are from pension funds and 37% are from corporate clients.
“These new mandates reflect that institutional investors are widening their choice of asset classes and investment strategies, including risk-based ones,” said Norbert Enste, head of Metzler Asset Management.
A master fund centralises the back-office administration of German institutional funds, reducing costs and boosting transparency. Along with market leader Universal-Investment, Metzler pioneered master funds in the 1990s. More than half of Metzler’s €20bn in assets are in these structures.
Metzler does not require that it undertakes any of an institutional client’s portfolio management when creating a master fund, although a spokesman said this did occur in most cases.
Indeed, another key growth driver for Metzler has been setting up contractual trust arrangements (CTA) – an external fund for pension liabilities – for mostly small and midsize enterprises (SMEs).
In creating the CTA, Metzler typically conducts an asset-liability study to form the base of the fund’s investment strategy.
Metzler said that since the launch of its CTA in September 2003 it had won some 200 corporate clients. Several are from the industry around Metzler’s base in Frankfurt, including chemicals firms Celanese and Clariant and the graphite maker SGL Carbon.
Metzler also said its mutual fund assets had grown to €4.4bn, from €2.9bn at the beginning of the year. This was partly due to Metzler Fund Xchange, a platform that gives investors – including those investing corporate pension assets – access to 120 domestic and foreign funds.
Finally, Metzler said its multi-manager funds, launched in 2003 with Russell Investment Group as advisor, had taken €400m in assets from mostly institutional clients.