MAN, Deka in German hedge venture
GERMANY – MAN Group, a UK-based specialist in hedge funds, is teaming up with Germany’s Deka to offer a fund of hedge funds, or Dachhedgefonds, to German retail and institutional clients from the first quarter of 2005, IPE has confirmed.
Under the co-operation, MAN will create and manage the Dachhedgefonds, while Deka sells it to German investors. Deka is Germany’s second-biggest provider of mutual funds and its third-biggest provider of institutional funds.
On the institutional side, the Dachhedgefonds will be offered to Germany’s publicly owned savings banks (Sparkassen) and state banks (Landesbanken), according to Andreas Benz, regional manager at MAN Group with responsibility for Germany.
As the Dachhedgefonds is to be domiciled in Germany, the two partners are still awaiting its approval by BaFin, the German financial services regulator. This process should be completed sometime in the first quarter of 2005.
Benz told IPE that in creating the Dachhedgefonds, his firm would choose between 20-30 different hedge funds outside of Germany. “But that’s just what we’ll start with. As we go forward, we intend to greatly widen the selection of hedge funds for the product,” he said.
MAN Group’s partnership with Deka marks its entry into Germany’s fledgling hedge fund market, which was created at the beginning of 2004 by the government’s investment law.
However, demand for hedge funds in Germany has so far been underwhelming. While experts had predicted that the products would attract as much as three billion euros this year, that figure will be closer to one billion. In 2005, German investor inflows to hedge funds should double to two billion euros, experts say.