Crowded fund market sees new Alliance
The decision follows several other Western groups and Polish banks announcing plans to establish mutual funds, among them Franklin Templeton/Bank Handlowy, Creditanstalt Securities/Bank Gospodarki uywnocciowej, CS First Boston Investment Management/PKO BP and Fidelia.
For the last two years, the field has been monopolized by Pioneer Trust Fund Poland.
"Competition is healthy," said Jon Groom of Alliance Capital Management in London. "New funds should stimulate demand."
The market is liquid enough for all of the funds, said Wojciech Gryko, deputy director of Pekao SA's Central Brokerage House. He added that research by the bank showed that private households had around $28 billion which was not invested in banks. The fund will be a balanced-fund, investing in bonds and equities. Investing in mutual funds was a safer option for clients, too, he added. "Bond funds are a good escape vehicle when something is going wrong in the stocks. They're a kind of escape island," said Gryko. But he expects the market for aggressive growth funds like stocks to be popular. "Polish people are keen to take risks," he said. Rate of return of the fund was impossible to forecast at this time, he said. The fund also intends to introduce pension plans in preparation for the pension fund market.
Pekao officials said they expect the Securities Commission to approve their fund application by the end of October and hope to have the joint venture up and running early next year.
Pekao will hold a 51% stake, with Alliance Capital Management taking the remaining shares in the venture. The size of the investment will be decided on by the management board at a later stage.
Gryko said that the bank decided to work with the U.S. company because of Alliance's global presence and fund experience. Alliance Capital Management has dealt with Pekao's investments in the international capital markets since 1991, Gryko said. The Pekao-Alliance joint venture will concentrate initially on the domestic market for investors and investment opportunities.
Groom of Alliance said he expects Alliance later to bring international investors to the Polish market. Alliance Capital Management operates on an international scale with over 100 mutual fund portfolios with assets under management of $126.3 billion.
For the last two years, the field has been monopolized by Pioneer Trust Fund Poland.
"Competition is healthy," said Jon Groom of Alliance Capital Management in London. "New funds should stimulate demand."
The market is liquid enough for all of the funds, said Wojciech Gryko, deputy director of Pekao SA's Central Brokerage House. He added that research by the bank showed that private households had around $28 billion which was not invested in banks. The fund will be a balanced-fund, investing in bonds and equities. Investing in mutual funds was a safer option for clients, too, he added. "Bond funds are a good escape vehicle when something is going wrong in the stocks. They're a kind of escape island," said Gryko. But he expects the market for aggressive growth funds like stocks to be popular. "Polish people are keen to take risks," he said. Rate of return of the fund was impossible to forecast at this time, he said. The fund also intends to introduce pension plans in preparation for the pension fund market.
Pekao officials said they expect the Securities Commission to approve their fund application by the end of October and hope to have the joint venture up and running early next year.
Pekao will hold a 51% stake, with Alliance Capital Management taking the remaining shares in the venture. The size of the investment will be decided on by the management board at a later stage.
Gryko said that the bank decided to work with the U.S. company because of Alliance's global presence and fund experience. Alliance Capital Management has dealt with Pekao's investments in the international capital markets since 1991, Gryko said. The Pekao-Alliance joint venture will concentrate initially on the domestic market for investors and investment opportunities.
Groom of Alliance said he expects Alliance later to bring international investors to the Polish market. Alliance Capital Management operates on an international scale with over 100 mutual fund portfolios with assets under management of $126.3 billion.
