Slim pickings for latecomers
The new member states of the European Union offer foreign fund managers a fast growing asset pool. However, the market has already been targeted by such firms as Allianz Dresdner. Is it too late for others to make an impression? The chance to shine may come when investors look outside their home markets.
THE COUNTRIES THAT joined the European Union at the beginning of this month are set to experience sizeable growth in both retail and institutional assets. It's a mouthwatering prospect. A number of foreign fund managers have already positioned themselves to take advantage. Those that do not already have a presence or relationship with a domestic player are likely to find it difficult to participate, particularly in the pension fund market.
Even those with operations in these countries face medium-term restrictions.
Pension fund assets in the eight central and eastern European countries that have joined the EU are set to reach between e111 billion and e148 billion by 2010, according to Allianz Dresdner Asset Management (Adam). That is a minimum of 822% growth from the e13.5 billion that these countries had in mandatory pension fund assets at the end of 2002.
These CEE countries have successfully and rapidly transformed their previously fully state-funded pension systems into three-pillar systems. This has helped to reduce the financial burden on state pension agencies.
Dorothee Fleischer, head of pension research at Adam, says: "Poland and the Baltic countries have already achieved the long-term stability of their pension systems and not many in Europe can say that."