Morgan Stanley Plans To Attract Germany's Wealthy

Philip Morton, InvestorsOffshore.com

22 March 2001

German daily Handelsblatt reported this week that US investment banking giant Morgan Stanley Dean Witter (MSDW) plans to break into the German market for asset management as part of a Europe-wide expansion programme, which sees Germany and the UK as the key centres for attracting high net worth individuals.

Germany, certainly, is viewed as a good market to tap into at present. The number of millionaires in Germany is expected to rise as tax reform effective in 2002 will make it easier to sell small and medium-sized businesses. According to a study by Merrill Lynch & Co and Cap Gemini Ernst & Young, approximately 365,000 Germans have more than 1 million euros (US$890,000) and 3,700 of them are worth more than 30 million euros.

Handelsblatt said that MSDW will introduce two asset management units in April and May this year in Frankfurt and Munich, with a third in Berlin to follow in July. Their operations will be subject to a trial phase until the autumm. If they prove a success, MSDW will set up a capital-investment company. The bank will be looking to cover the full range of services for asset-rich private investors as well as for institutional clients. Among the services on offer will be the sale of own-brand and external funds as well as the management of occupational pension funds in line with Germany's planned reform of the pensions system.

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