Deutsche Asset Management is repositioning its pension advisory function to help pension funds, both in the United States and overseas, cope with a rapidly changing marketplace.
The asset management subsidiary of the $550 billion-asset banking company will have its hands full in coming months as it advises many European pension funds, said Maarten Nederlof, newly appointed New York-based head of the units global pension strategies.
With the shift from defined benefit to defined contribution plans accelerating in Europe, the needs of contributors, as well as of fund managers, are changing, too, he said.
Many European Union countries also are either considering or actively pursuing pension regulation reform, partially as a result of the continents aging population and relatively low savings rate, Mr. Nederlof said.
Equity markets and traditional equity products like mutual funds are starting to look less attractive to pension fund managers both in the United States and overseas. Mr. Nederlof said he is finding, as a result, that pension fund managers are turning to alternative products such as hedge funds, which have fewer investment restrictions.
However, because these alternative products are riskier than mutual funds, pension funds often have difficulty making use of them. Most regulatory regimes bar pension funds from pursuing risky strategies.
In order to attract pension business, hedge fund managers often must craft investment strategies specifically for pension funds in order to satisfy regulators, Mr. Nederlof said.
He was brought over from the banks global equity derivatives group to help its pension fund clients worldwide prepare for reform of pension regulations and the mapping of investment strategies.
In his new post, Mr. Nederlof is to work with Deutsche Asset Managements sales staff and with the companys investment research and client services departments to create financial products and tailor old ones to pension clients needs.
The full variety of pension products available through Deutsche Bank domestic and international equities as well as fixed-income investments, often created with just one or a few clients in mind has never been listed in one place that can be presented to new clients, Mr. Nederlof said. He plans to pull together under his management the marketing of all these products to pension funds.
He said he will also be advising the companys pension clients on how to pick a hedge fund manager and on proper asset allocation in this changing market.
The company plans to unveil several investment products soon, but Mr. Nederlof declined to comment on them in advance.
If there are solutions that do not involve our products, we should be building those products, Mr. Nederlof said.