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Deutsche fund arms best for pensions - survey

GERMANY - Institutional fund manager Deutsche Asset Management and its retail sister DWS are best positioned to win pensions business in Germany, according to a new survey of 43 asset managers in that market.

According to the survey, DeAM/DWS got the most votes - seven - when the asset managers were asked who was best positioned for pensions business.

Allianz Global Investors came in second with five votes, followed by Metzler Asset Management (three) as well as HSBC Trinkaus & Burkhardt and Invesco (two). Deka, Fidelity, Goldman Sachs and Union Investment got one vote each.

The survey was compiled by Kommalpha, a consulting firm launched last May by Hans-Jürgen Dannheisig, the former chief executive of BHW Invest, a now-defunct fund administrator.

"The results were based on what the 43 asset managers told us. Of course, one could vote for oneself, but I didn't count that," Dannheisig told IPE.

Meanwhile, Nikolaus Schmidt-Narischkin, head of corporate pensions at DeAM, said: "Investment products can only be sold in the pensions area if one fully understands the business' particulars and has the proper platforms. DeAM and DWS have the relevant expertise and the market seems to agree with that."

The survey also reflected that of the sources of pensions business, the asset managers felt that external funds called contractual trust arrangements (CTAs) were currently the most important.

Nearly 20 German companies listed on the blue-chip Dax index have created CTAs for their pension liabilities, which were formerly funded by on-balance sheet assets. Partly because of this, DeAM believes Germany's CTA market will total at least €15bn in 2006 alone.

After CTAs, the asset managers ranked overtime accounts second in terms of important pension business, equity-oriented Pensionsfonds third, insurance-type Pensionskassen fourth and Unterstützungskasse (support funds) fifth.

Germany's Riester Rente, a government-subsidized private pension which asset managers may also distribute, came in last. "This isn't surprising considering that Union Investment is by far the market leader with 700,000 contracts sold," Kommalpha said.

All told, the survey said pensions money made up one-third of the €725bn in total assets held by the managers as well as 75% of all new inflows to them. The survey added that pensions accounted for 27% of the asset managers' budget, including 10% for information technology and 17% for marketing.

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