Unicredito moves to create Poland's largest asset management company
Looking forward to a day when more Poles put savings into mutual funds, Unicredito Italiano is creating the country's biggest asset management company by joining two of its subsidiaries.
Bank Pekao, owned 53% by UniCredito, and Boston-based Pioneer Investments, whose parent Pioneer Group was purchased by the Italian giant earlier this year, will combine roughly zl. 120 billion ($26.7 billion) in assets under management and zl. 10 billion ($2.2 billion) in real assets to form Pioneer Pekao Investment Management. CDM Pekao Securities will be left alone, though its asset management department will mesh with the new company.
The company's CEO-to-be, Daniel Kingsbury, is already speaking of expanded offerings, "state of the art" investment vehicles and eventual euro-zone investment strategies, but for the time being the deal is waiting for clearance from the Securities and Stock Exchange Commission (KPWiG) and the Office for Competition and Consumer Protection (UOKiK), among others.
"As the day dawns that Poland will join the European Union, Poland will more and more want to invest in the European Union and we will be ready to do that," said Kingsbury, currently head of the New Europe Division at Pioneer Investments.
Considering that UniCredito also owns Europlus, a leading fund management firm in Italy and other parts of Europe, Pioneer Pekao Investment Management could become a force to be reckoned with.
"The combined entity will have a significant market share," said Jean Pierre Lambert, an analyst in London with HSBC Securities, mentioning that interest in mutual funds should rise in Poland as soon as interest rates fall.
At that point, Lambert said, the timing should be right for Poles to begin diversifying into European and U.S. equities. And "Pioneer is in a position to offer both," he added.
Combined with Pekao's distribution network, the new company will be able to enlist clients throughout the country, Lambert said.
Pioneer currently offers five varieties of investment funds an American fund, an equity fund, a bonds fund, a mixed fund and a privatization fund while Pekao has four.
Michal Szymanski, an investment manager at ING BSK Asset Management, said the bulk of funds offered in Poland are dedicated to domestic equities. The day has yet to come, he said, when Poles on a large scale will have either the savings or faith in the market to catch the mutual fund fever witnessed in the West over the last few years.
Eventually the perception of funds will change from that of speculative risk to one of savings opportunity, Szymanski said. But for now, and though some funds currently offer low minimum investments for small-scale investors, it's mostly an option exercised by wealthy or institutional investors.
ING BSK, for its part, requires a zl. 200,000 minimum.
Pioneer Pekao Investment Management will be 51% owned by Pioneer Investments, and 49% by Pekao. CDM Pekao Securities, a subsidiary of Bank Pekao, opened in March 1991 and was Poland's first post-communist brokerage.
