GERMANY – US fixed-income specialist Principal Global Investors plans to open a branch in Munich from January 2006.
Heiko Schuleit, head of the German-speaking countries at PGI, told IPE that the idea was to not only to better cover the German and Austrian markets but to use Munich as a springboard for the Swiss market.
Until now, PGI had been serving these markets from London, forming distribution partnerships with asset managers locally.
PGI teamed up with ABN Amro Asset Management and German private bank Merck Finck a year ago to launch a preferred securities fund for German institutional investors. PGI is the manager of the fund, while ABN Amro and Merck Finck distribute it.
Schuleit said that beyond the preferred securities fund – its most well known product – PGI offered high-yield bond and real estate funds for German institutional clients. Schuleit will be based in Munich with a staff of four, including a senior sales manager that he plans to hire.
PGI has racked up at least $500m (€415m) in assets from the German-speaking lands. It has 60 institutional clients, including pension funds, though insurers are its biggest client. Schuleit noted that in Switzerland, PGI regarded pension funds as the top priority.
“We think that especially with our preferred securities fund, we have what pension funds are looking for: investment grade rating combined with a higher yield than they can get with other types of high quality debt,” said Schuleit.
Des Moines-based PGI has $160bn in assets under management, 85% of which are in fixed-income mandates.