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Jobs safe as State Street exits German KAG biz

GERMANY - State Street Global Advisors is to exit the German KAG investment trust business, citing regulatory changes, to focus on asset management.

The move, which will see around 900 million euros transferred to other providers, will not involve any job losses, SSGA said.

SSGA said it would discontinue its Kapitalanlagegesellschaft, or KAG, status in response to "recent regulatory changes". It would focus on its core business of asset management and advisory services.

"Everybody in the team will stay in the team," said Klaus Esswein, head of SSGA in Germany in an interview. "So, no jobs to go." He added: "I'm positive that we will not have any negative impact on_revenue."

The separation of activities between the Munich-based KAG State Street Global Investments GmbH and State Street Global Advisors GmbH was now no longer required, SSGA said in a statement. They will be merged on September 30.

The KAG arm had provided asset management to institutional clients as well as administration of Spezialfonds.

"The designation as a German KAG is no longer necessary to deliver the services for which institutional investors and their consultants know us," Esswein said. "With our new streamlined operations we will be able to provide services in a more efficient manner."

SSGA's seven Specialfonds administration clients - which Esswein declined to name - will be transitioned to new providers. The total assets involved was around 900 million euros in total, Esswein said.

"We are very confident that this new alignment will be seamless to our clients," said Esswein.

Last month the German investment fund industry association, the BVI, said the volume of funds reserved to institutional investors, Spezialfonds, had grown about five percent since last year.

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