Chinatrust, Deutsche Bank to establish fund company

Deutsche Asset Management, a division of Deutsche Bank, said yesterday that it will form a joint venture mutual fund company with Taiwan's Chinatrust Commercial Bank (中國信託商業銀行).

"We are now in the process of establishing a mutual fund house," said Jessica Cherng (程憶華), spokesperson for Deutsche Asset Management. "We expect to start the operation of the mutual fund house by July."

The NT$300 million joint venture, KG Securities Investment Trust Co, will develop Taiwan's potentially lucrative mutual fund market and also offer newly-deregulated discretionary investment management services to investors, the company said.

Chinatrust Bank will be the largest investor, with a 40 percent stake, followed by China Securities Co (中信證券), 25 percent and Deutsche Bank, which owns 20 percent of the mutual fund firm.

Choy Peng Wah, chief executive officer of Deutsche Asset Management (Asia) Ltd, said that the new firm will be a combination of "local knowledge and global fund management expertise."

Increasing deregulation in the asset management industry has attracted major fund management houses to either seek local partners or acquire them to gain a quick foothold in the domestic market.

"Although the market appears to be very crowded, Deutsche Asset Management believes that there are substantial growth opportunities on the back of the liberalization of pension funds," Choy said.

ING Group has joined with Chang Hwa Bank (彰化銀行) to create ING-CHB Investment Trust, while Kuang Hua Securities Investment and Trust Co (光華證券投信), one of Taiwan's largest mutual fund companies, has joined with ABN AMRO.

Prudential, the UK's largest fund management house, bought Core Pacific Securities Investment Trust Co (京華證券投信) last year, while US-based Prudential has acquired Masterlink Securities Corp (元富證券) to create Primerica Investment Trust Co in Taipei.

Meanwhile, Chinatrust Commercial Bank estimates annual pre-tax profits for 2001 will hit NT$10.008 billion, up 10.94 percent over 2000 pre-tax profits of NT$9.021 billion, the bank said in a statement yesterday.