GERMANY – Metzler Asset Management says its German corporate pensions business is booming, with contributions from the business set to more than double to €250m in 2006 from €105m in 2005.

In German corporate pensions, Metzler is active as both an asset manager and a consultant.
At the end of 2005, total assets from this business totalled €1.5bn, up around €550m from the previous year.

Metzler’s €1.5bn in pension assets include €500m that originate from contractual trust arrangements (CTAs), or external funds set up to finance pension liabilities.

Metzler also said it had a total of 184 corporate clients, including consumer chemical group Henkel, Deutsche Börse, Citibank, Swiss food group Nestlé and VBL, a €10bn pension fund for German public sector employees.

“We are not, however, managing the assets of all these clients. Rather, in many cases, we are providing advice on administrating their pension plans,” Norbert Enste, head of Metzler Asset Management, told a news conference in Frankfurt today.

“For example, the assets from Henkel are not invested in our funds but in multi-manager funds managed by our partner Frank Russell,” Enste said.

According to Metzler, which acts as the distributor in Germany, Russell’s multi-manager funds have taken in €400m in assets, mostly from institutional clients.

Metzler’s pension business includes Metzler Pension Trust, a unit which helps German firms construct CTAs. The business also has a unit which helps firms establish ‘overtime accounts’.

Overtime accounts enable employees to save, on a tax-deferred basis, the monetary equivalent of overtime hours, unused holiday, cash bonuses or a portion of salary to help finance early retirement or time off work. Amid their fast-growing popularity in Germany, many asset managers now provide the accounts.

Metzler also said that currently, it had €24bn in assets under management, up €4bn from the end of 2005. Around €11bn of these assets are invested in so-called master funds.

A master fund centralises the back-office administration of German institutional funds, reducing costs and boosting transparency. Along with market leader Universal-Investment, Metzler pioneered master funds in the 1990s.

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