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Spezialfonds market opens up in Germany and Austria

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GERMANY/AUSTRIA –The Spezialfonds market in Germany and Austria is increasingly opening up to foreign asset managers and providers, according to a report by RCP & Partners, a European fiduciary rating agency.

Spezialfonds are investment funds established exclusively for institutional investors.

RCP’s latest report on investor perspectives in the German and Austrian Spezialfonds market shows that attitudes are changing towards asset managers. Institutional investors are becoming more critical, professional, informed, and open to foreign managers and alternative investments.

Says the report: “Over the last two to three years foreign asset managers have shown increased interest in establishing themselves in the German institutional market. Swiss, Dutch and particularly British investment companies are keen to enter the German market.

“The impetus for developing and expanding business in German-speaking markets arises from the outlook for the retirement provision sector. These countries are already well-versed in the investment and assessment of funds, and foreign providers would like to bring their expertise into the market.”

Fifty percent of investors already work with foreign asset managers, although Austrian investors are more open in this regard – 75% of investors have foreign providers managing their funds, compared to just 44% in Germany – although, the report says, this could be due to the restricted number of Austrian investment companies. Every fourth respondent to an RCP survey said they would consider both foreign and domestic asset managers. Forty-four percent said they would prefer a domestic manager only.

Foreign providers have also changed their penetration methods in the market. “Whilst two years ago the need to support an investor ‘on-site’ was not considered as an option, this has completely changed” - a move welcomed by investors. One third of investors interviewed placed importance on ‘on-site’ support.

According to RCP, 488.5 billion euros were invested in 5,297 Spezialfonds in Germany at the end of 2002, down from 492.3 billion at the end of 2001. In Austria participation had increased.

Assets invested in Spezialfonds and Grossanlegerfonds in 2002 amounted to 41.2 billion euros up from 35.6 billion in 2001. This is attributed to the continuous growth and development in the number of pensions vehicles such as Pensionskassen in comparison to the proceeding years.

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