DeAM unveils ambitious multi-manager plans
GERMANY - In a much anticipated move Deutsche Asset Management (DeAM) has unveiled its plans to launch multi-manager funds for the German-speaking institutional market and has ambitious growth targets despite slow sales at rivals.
DeAM has teamed up with German investment consultant RMC to offer two multi-manager funds to institutional investors in German-speaking Europe from the second quarter onward and expects to take in €2bn within two years.
DeAM said it would launch and distribute the funds, which invest will separately invest in global equities and global bonds. DeAM said RMC would advise it in the selection of more than 100 asset managers worldwide for management of the two funds.
Launch of the funds, to be domiciled in Germany, depends on DeAM getting between €100m and €200m in initial capital, though the asset manager is confident of this.
Matthias Dedio, head of institutional products at DeAM, observed that the two funds were ideal for all institutional investors. “First off, the funds are ideally suited to smaller insitutional investors, as they save them the trouble and cost of investing in Spezialfonds,” he told IPE.
Spezialfonds are traditional German institutional funds which are beneficial from a tax, cost and diversification perspective. However, their investment threshold usually is €100m and more.
But Dedio also said DeAM’s multi-manager funds would be attractive to frequent Spezialfonds investors too, as the products spared them the cost and hassle of complying with the new International Financial Reporting Standard (IFRS). Under IFRS, German institutional investors with more than 20% of their assets in Spezialfonds must report every single investment made by those funds.
Dedio said due to the funds’ expected resonance among investors they would be expected to take in €1bn each within two years of being launched.
DeAM’s foray into multi-manager funds follow similar moves on the part of German rivals Cominvest and Metzler Asset Management.
At the beginning of 2004, Cominvest joined forces with US multi-manager fund provider SEI to sell the products to smaller institutional clients in Germany. The same year, Metzler begun a similar alliance with Russell Investment Group, SEI’s arch-rival.
However, the Cominvest-SEI alliance has attracted a mere €150m in assets so far from German clients. It is not known how much in assets Metzler and Russell have taken in.