RUSSIA - Moscow-based Pallada Asset Management has won a mandate estimated to be worth around US$30m, from the Ministry of Atomic Energy to manage part of its occupational pension fund.
This new pension plan is expected to be administered by the ministry’s pension fund, Blago.
Other mandate wins for Pallada, part of State Street Global Alliance, in January were for PoVolzhky, the pension fund for the Ulyanovsk region, worth US$200,000; and for the pension fund for the coal sector, Ugol, to manage a tranche of assets worth around $120,000.
Pallada is making great strides in increasing its assets managed on behalf of pension funds: assets under management for the pension fund for Norilsk Nickel, Interros, are set to rise to around US$1m; and RAO UES is increasing its allocation to equities by 50%, the mandate managed on its behalf by Pallada.
The Russian pensions market is just opening up with new reforms in place. Some US$8bn is expected to flow into pension funds annually, but home grown asset managers are taking the bulk of business.
Foreign managers are finding it tough to get a foot in the door with scare stories circulating about the reliability and transparency of process afforded by foreigners. Regulators are also dragging their feet on licensing foreign managers to operate in the country.
At the time of the Russian economic crisis many foreign managers decided to pull out of the country, and they have not returned.
Russian pensions market reforms have introduced DC type plans, giving employees the choice of either opting into the state scheme or investing their contributions into private funds offered through their employers.
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