Munich-based Siemens Fonds Invest (SFI), the in-house asset manager of Siemens’ pension assets, is opening up its investment platform to manage pension liabilities of other companies and expand into private equity.
“We are opening up Siemens’ investment expertise to external investors,” said Heiko Thomas Fischer, head of pension and investment management, in an interview with the publication Capital.
Through this strategic shift, SFI aims to grow its business with institutional investors by leveraging its know-how in private equity, relieving companies from the burden of managing pension obligations, and offering fund management services.
SFI manages around €25bn, including €6bn in mutual funds. It intends to pool assets for private equity investments not only from corporates and asset managers, but also from family offices and insurers.
“We have a team with many years of experience for investing in private equity funds and also benefit from Siemens’ global network,” Fischer said.
Chief executive officer and chief investment officer Erik Macharzina added that SFI will not pursue European Long-Term Investment Funds (ELTIFs).
According to Fischer, the expansion of the investment platform is underpinned by expectations that investors will increasingly turn to liability-driven investment (LDI) strategies amid heightened market volatility and interest rates.
Some German corporates have already adopted LDI. Lufthansa, for example, restructured the portfolio in its contractual trust arrangement to increase its fixed income allocation, while E.ON has developed a full LDI approach using a collateral pool of European government bonds and OTC derivatives.
Fund management expansion
Fund management and administration – “a service we have always offered at Siemens”, according to Macharzina – represents a third growth segment for SFI. The firm will target foundations seeking tailored fund management services.
Fischer explained that reshaping the strategy for institutional investors is centred on maintaining cost efficiency.
“We will not build a large distribution unit and will stick to our roots. Our primary goal is to work efficiently for the group and offer this expertise even more to external parties,” said Macharzina.
SFI has set up a small distribution team and continues to emphasise cost advantages. Its funds typically carry lower costs than those of other managers because Siemens does not rely on external sales partners charging high fees, it added.
“We want to provide Siemens employees with affordable access to investments, and therefore keep costs low,” Fischer said.
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