GERMANY - Publishing group Bertelsmann has awarded a fiduciary mandate for the management of its pension liabilities, the company has confirmed to IPE.

This step makes Bertelsmann the second German company to go into fiduciary management - a route mainly taken by Dutch companies at the moment.

"Fiduciary management offers a coordinated process: a 'one-stop shop' from the determination of the strategic asset allocatio,n to negotiating the contracts with the asset managers, up to reporting and standardised risk assessment," a spokesman for Bertelsmann said.

"This facilitates managing the portfolio," he added.

Bertelsmann would not reveal who has won the mandate and the spokesman was also unwilling to confirm whether all or parts of the asset management services were being outsourced to the new provider.

But the group has placed parts of its €2.7bn pension reserves - most of them in Germany - in a Contractual Trust Agreement (CTA), leaving €1.1bn in unfunded net pension liabilities.

Reasons as to why fiduciary management has not taken off in Germany, in the same way as it has in Holland, are many as well as disputed among market participants.

Some pension fund sources believe German companies were late in using consultants compared with other countries in Europe, including the Netherlands, which means they are in late in using fiduciary managers.

Others pensions experts say there is still a mistrust against 'one-stop shops' because people believe it leads to a concentration of power.

Henkel was the first German company to go fiduciary last year, awarding its mandate to Goldman Sachs Asset Management.

More information on the development of fiduciary management in German pensions will be revealed in IPE's May issue, published next week.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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