HSBC Holding Plc’s Turkish asset manager is in talks with more pension fund firms to manage their funds as efforts to increase savings take off with government incentives.
HSBC Portfoy Yonetimi AS, which agreed with Allianz SE’s Istanbul-based pension fund in 2011 to manage part of its funds, aims to increase the share of pension funds among the assets it manages after the government pledged to contribute 25 percent to savings in the so-called individual retirement system, or BES, from this year, HSBC Portfoy Chief Executive Officer Namik Aksel told reporters in Istanbul today. He declined to name the companies his company is negotiating with.
HSBC Portfoy manages more than four billion liras ($2.05 billion) of assets and a quarter of that is from pension funds including Allianz and Anadolu Hayat Emeklilik AS, Turkey’s biggest pension fund manager, Aksel said.
“We want to be among the top four asset managing companies in Turkey and pension funds will be a driving force in attaining our target,” Aksel said. “We expect a 20 percent increase in the size of total pension fund savings in Turkey in the next five years.”
Turkey’s biggest four asset managing firms rivaling the HSBC unit are Is Portfoy Yonetimi AS, Yapi Kredi Portfoy Yonetimi AS, Ak Portfoy Yonetimi AS and Garanti Portfoy Yonetimi AS, Aksel said. The country’s assets managers have a total portfolio of 56 billion liras, including 33.5 billion liras in non-pension fund instruments such as stocks and bonds, he said.
The government aims to promote savings as a way to cut current account deficit by introducing the 25 percent contribution incentive, targeting savings under the BES to 300 billion liras by 2023 from 23 billion liras, or 1.5 percent of gross domestic product, at the end of the first six months of this year, said Meral Eredenk, chief executive of AvivaSA Emeklilik & Hayat AS, a joint venture between Haci Omer Sabanci Holding AS and Aviva Plc. The premiums under the plan will probably rise to 27.4 billion liras by the end of this year, she said in an e-mailed statement today.
A government regulation passed last week that will allow asset managing firms to set up mutual funds will support the industry’s growth “significantly” after it takes effect from July 2014, Aksel said. Currently only banks are allowed to set up mutual funds in Turkey.