Raiffeisen Capital Management, the fund management arm of the ambitious Austrian bank, Raiffeisen Zentralbank (RZB), is planning to offer seven of its 30 mutual funds in the UK market. It is also seeking to raise its hitherto low profile by offering the funds through an as yet undisclosed offshore location.
RZB plans to distribute the funds in the UK via funds of funds managers, insurance companies and the larger IFA networks rather than through retail outlets.
The seven funds, all of which are UCITS funds researched and managed from RZB’s headquarters in Vienna, consist of three equity funds and four fixed income funds.
The three equity funds are a Raiffeisen Eurasia Equities fund, which invests 30 percent of its assets in upcoming markets in China, India and Russia and 10 percent in Turkey, a European small cap fund and RZB’s flagship Eastern European fund, which is already running € 1.2 billion.
The fixed income funds, which include the EuroPlus Bonds Fund and the Convergence Bonds, invest mainly in debt issued in Central and Eastern European markets, though one is an AAA rated fund invested in Euromarkets debt issued by Central and Eastern European governments. The Convergence Bond currently will soon include Russia, Turkey, Bulgaria and Croatia among the list of Central and European countries.
The seven funds are already offered in France, Germany, Italy and Spain.
The largest problem RZB faces is establishing an appetite among UK fund managers for investment in Central and Eastern European instruments, says an RZB spokesman.
RZB, the largest banking group in Austria, claims a special expertise in the region by virtue of the fact it operates in 16 markets there, where it has relationships with more than 1,000 businesses.
Despite emerging from the co-operative banking system in Austria, which means it is still controlled by the regional arms of the local Austrian savings banks, RZB has developed an aggressive expansion strategy in Central and Eastern Europe, buying local banks in all of the major markets.
The company purchased IMPEX Bank in Russia in May this year, and has high hopes of a banking market it expects to grow by 25 per cent a year for the next six years.
RZB floated 30 per cent of its stock on the Vienna Stock Exchange last year.