FRANKFURT, Germany -- Metzler Asset Management GmbH is spreading its wings.
The money management arm of the Frankfurt-based private bank is expanding its activities beyond its home base of Germany.
The bank, with E6.5 billion ($6.9 billion) in assets under management, is seeking segregated institutional mandates in the Netherlands -- largely medium-sized pension mandates. Metzler officials aim to pick two other European markets in which to develop their institutional and retail strategies by year-end.
In addition, the bank has established Metzler International Investments Ltd. in Dublin, Ireland, to provide European Union-wide distribution of its mutual funds. Several funds are being marketed in Germany.
Meanwhile, a recently opened Italian subsidiary, Metzler Italian SIM SpA in Rome, is pursuing private client business; the bank well might expand into the Italian institutional market as one of its key new directions. A separate equities sales unit in Milan might help form the foundation for an asset management business, said Matthias Klein, assistant director.
"We have accepted that our domestic market is not just Germany but Euroland," he said.
In turn, German investors have started buying Euroland stocks and bonds during the past 10 months, he said.
Metzler already has 19 mutual funds, 76 spezialfonds (special mutual funds designed for up to 10 institutional clients) and 12 advisory mandates.
Meanwhile, Metzler's joint venture with Payden & Rygel, Los Angeles, has been a success. Started last October, Metzler/Payden LLC already has nearly $500 million in assets under management, split roughly evenly between European clients investing in U.S. bonds and U.S. institutional clients investing in European equities.
Metzler officials are trying to adapt Payden & Rygel's credit analysis to the market for corporate bonds that is emerging in Europe. Previously, 80% of fixed-income performance was attributable to currency bets.
"We are more an equity house; they are a fixed-income house," said Christa Schoning, managing director of Metzler's institutional business.
The firm has sent its portfolio management heads to Los Angeles to study Payden & Rygel's credit-management style. One portfolio manager, Nicole Dufft, has relocated to Los Angeles as a senior portfolio manager for the joint venture.
"I think the interest is very high," Ms. Dufft said. "The appeal is the portfolio manager is sitting in Europe and managing assets, but they still have client servicing" done in the United States.
Meanwhile, the bank recently recruited a new head of portfolio management, Frank-Peter Martin, a former managing director of J.P. Morgan's KAG in Germany. The previous chief investment officer, Bernd Bauer, left in January following a dispute on the bank's future direction.
