Invesco launches DC products in Germany
GERMANY – Asset management group Invesco is set to enter the new German occupational pension fund market by the Autumn. Encouraged by the Riester reforms, the group’s planned defined contribution products will comprise either multi-employer funds or single pension schemes for larger companies.
Christof Quiring, head of pensions management at Invesco’s Frankfurt office, says asset management companies have been unable to penetrate the pensions market in Germany before the reforms because insurance companies have traditionally dominated the retirement benefits market.
“Because the new pension funds come with guaranteed pay-outs, many asset managers are put off getting involved. We are talking to a couple of insurance companies about setting up strategic partnerships in which they will look after the guaranteed elements and administration whilst we will take care of the investments. That way we can get more than a foot in the door,’ Quiring says.
Quiring cannot name the insurance companies as the contracts haven’t been signed yet but the decision to enter the pensions market was taken late last year.
“We predict the market will be worth at least €30bn by 2008. Our own funds will probably manage some €50m by 2005. That might not seem like much but after a slow start we think the industry as a whole will find its own dynamic and then really take off. We believe this is the future of asset management in Germany,” says Quiring
Invesco will manage and market the funds from its offices in Frankfurt, though the business will exist as a separate legal entity. “We have formed a dedicated sales and marketing team that is already promoting the new products to be grouped together in Invesco Pensionsfonds,” explains Quiring.