Банкеръ Weekly



The merger agreed between German insurance company, Allianz, and Dresdner Bank will give the merged entity Eu1 trillion ($875 billion) in assets under management, ranking it among the top five global asset managers. But it may harm Dresdner's fund management business in the short term, comments Euromoney.
Allianz's fund management business is expected to be integrated with Dresdner Bank's Deutscher Investment-Trust (DIT). In Germany, DIT is the third-largest asset manager, after DEKA, which is owned by Sparkassen, and Deutsche Bank, which is second-largest. The merger will make the Allianz-Dresdner asset management business a close contender for second place.
At a conference for analysts after the merger, adds Euromoney, Allianz-Dresdner speakers confirmed that their plan for the asset management business was to expand our asset gathering capabilities by building customer-specific, multichannel distribution platforms. Allianz is expected to take responsibility for institutional and US-based asset management, and DIT for retail asset management business in Germany. But analysts are concerned that the distribution of DIT management funds will be damaged in the early days of the merger. Until now, 75% of DIT funds have been sold by Dresdner staff, and 25% almost exclusively by the financial consultancy, DVAG, which has a 15,000-strong sales force. Allianz, which has 12,250 sales people and which has traditionally not been a strong seller of mutual funds, may take some of the business from DVAG. Distribution through DVAG may be further harmed owing to pressure form Commerzbank, which has a cross shareholding and cooperation agreement with Italian insurance company Generali, which in turn owns 49% of DVAG. Analysts at investment bank, Fox-Pitt, Kelton, believe that up to half the inflow of business through DVAG could be lost and that it would take Allianz some time to build up distribution figures to compensate.
Euromoney cites James Hyde, banking analyst at Fox-Pitt, Kelton: Distribution is what this whole deal is about, both in and out of Germany. Until now, Allianz has primarily been an insurance agent. Now it wants multi-channel distribution, above all with a branch option. The new asset management arm of the merged entity will be run by Allianz's head of asset management, Dr Faber. Seventy-two percent of funds will be distributed through Dresdner Bank branches, 12% through agents and 16% through other unspecified channels. As a business unit, it is expected to represent 20% of the entire group's assets. The life insurance and equity businesses are also expected to grow. Bonds and deposits are expected to decrease as a proportion of overall group assets, affirms Euromoney.

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