RUSSIA – The Russian government has authorised 55 private asset managers to run pension fund money as part of the new reforms, but financial benefits for the managers will not be seen for some time, says the head of one of the winning firms.

With 55 managers competing for what initially will be only a small amount of roubles, little in the way of profits will be made for several years, explained Bernard Sucher, chairman of Alfa Capital.

Only a small amount of money is expected to be allocated to the private asset managers the first year, with Russians likely to be sceptical about entrusting their savings to institutions other than the state. Furthermore, the process of selecting asset managers and understanding capital markets will take time, yet the deadline to choose a manager is October 15. Those who do not choose an asset manager by that time will continue to have their pension savings managed by the state.

Yet, in spite of the lack of current benefits of managing the new pension money, Sucher believes it is important to be committed to the market.

“Some are of the view that unless you are in from the beginning, you may never get in. Plus it is negative PR not to be involved. If you are not committed in this area, then your other clients may perceive you as uncommitted elsewhere.”

Alfa Capital is among the 55 managers authorised by the government. Included among those also on the list are Troika Dialog, Pallada Asset Management and Nikoil Asset Management.

According to the Moscow Times, four companies were not granted authorisation, including Allianz AG’s Deutscher Investment Trust. A spokeswoman at Allianz told IPE that only companies with two consecutive years of positive earnings were authorised. DIT Moscow had opened in 2001 and had made a loss the first year. The company is hoping to reapply next year.

Money is expected to be transferred to the new managers by the middle of 2004.

Topics