LITHUANIA - Polish insurance group PZU is selling its Lithuanian pension fund management operations to investment bank Finasta.

Finasta's pension fund membership will more than treble to 37,000 through the acquisition of four pension funds currently administered by 'PZU Lietuva gyvybės draudimas' .

Market share held by Finasta investment management ('Finasta investicijų valdymas') will increase from currently just over 1.5% to 5.2%.

The largest market player by membership numbers is the Lithuanian investment arm of Estonia-based Hansa with 55.3%, according to a survey on the second pillar presented earlier this year.

A total of 680,000 people contribute to the second pillar and 33.8% and signed have their contracts with Swedish bank SEB's operations in the country while 8% is managed through the third-largest provider in the market Denmark-based DnB Nord.

PZU will keep some operations in Lithuania to focus on selling life insurance products.

Danius Valteris, director general of PZU in Lithuania, explained the step was a strategic decision by the company boards, following major growth experienced in the insurance sector.

Finasta's director Andrius Barštys also noted the increase in assets under management will allow his company to manage pension fund members' assets "in a more efficient way".

This is the second purchase deal Finasta has signed to grow its assets. Late last year, it took on board two pension funds from investment bank ' Medicinos banko investicijų valdymas'. The integration was finalised in July this year.

Finasta currently manages seven investment and six pension funds worth LTL600m (€173.8m) in assets.

Since pension reforms were introduced in 2003, Finesta's pension funds "have the highest profit in the market," a spokeswoman told IPE.