PwC Bamosz 2003

Implications of the EU Accession on theInvestment Management Industry in Hungary

July 2003

Introduction

The Association of Fund Management Companies in Hungary (BAMOSZ – Befektetési Alapkezelôk Magyarországi

Szövetsége) launched a joint project with PricewaterhouseCoopers (PwC) in the spring of 2003. Their objective was

to prepare and issue this joint study (White Paper) on the impact of the forthcoming accession of Hungary into the

European Union (EU) upon the investment management industry in Hungary.

The research was built on questionnaire-based interviews with 17 Hungarian (members of BAMOSZ) and selected

major international fund managers. The authors of this study express their gratitude to all those companies and

individuals who kindly participated in the process and shared their views on the subject. A list of the companies

contacted is an appendix to this study. The interviews were supplemented with desk research on the industry and

the implications of EU accession incorporating the relevant experience of PwC’s related recent studies completed

independently or in cooperation with other parties. The key sections of the study are the following:

• Development of financial services and investment management industry in Hungary;

• The Hungarian investment management industry today;

• The implications of the EU accession;

• The Hungarian investment management industry tomorrow.

Investment management is a young, but dynamically developing industry in Hungary. Undoubtedly, the

EU accession will be a milestone in this development and will bring about significant challenges for the profession.

Will the accession create opportunities and boost local investment management activities? Or, on the contrary, will

the Hungarian investment management market be overridden by foreign investment managers and products limiting

local activities to mere customer relationship management? Or else, the issue is a lot more complex and so shall be

our approach, as well!

Maybe this study does not address all the questions. But it does make an attempt to put the problem in context and

summarise the views prevalent in the marketplace. There will be ones who will disagree with our conclusions.

Nevertheless, if we raise awareness of the issues and contribute to the discussions on the future of the investment

management industry in Hungary, the study will have achieved its goal.

Dariusz NOWAK

Partner

PricewaterhouseCoopers

Gyula FATÉR Árpád BALÁZS

President Senior Manager

BAMOSZ PricewaterhouseCoopers

Péter HOLTZER Markus SCHWAMBORN

Member of the Board Senior Advisor

BAMOSZ PricewaterhouseCoopers

Study by PricewaterhouseCoopers & Bamosz

1

Table of contents

Introduction 1

Executive Summary 3

1 Development of financial services & investment management industry in Hungary 5

1.1 Financial services industry 5

1.2 Development of investment management industry in Hungary 6

2 The Hungarian investment management industry today 8

2.1 Regulatory environment – domestic products managed by domestic investment managers 8

2.2 Investment funds – mostly fixed income investment funds to retail clients 8

2.3 Market players 9

2.4 Asset management value chain 11

2.5 The income pattern of the asset management value chain in Hungary 12

2.5.1 Average fee levels in Hungary 13

2.5.2 Average fee levels in the EU15 13

2.5.3 Analysis of the differences in the Hungarian and the EU15 fee structures 14

3 The implications of the EU accession 15

3.1 Regulatory alignment to allow an inclusion into pan European distribution, and providing

for a level playing field 15

3.1.1 Products 15

3.1.2 Investment management activities, authorisation 15

3.2 The EU accession boost 16

3.3 The euro convergence 18

4 The Hungarian investment management industry tomorrow 20

4.1 International comparison 20

4.2 Market players – gradual changes in business strategy 20

4.2.1 Domestic investment managers 21

4.2.2 Foreign investment managers 21

4.3 Investment funds – will foreign investment funds become a threat? 22

4.4 Changes in distribution methods – will distribution channels become opened to third parties? 23

4.5 Changes in investment management value chain – how and where to compete in the investment

management value chain? 24

4.5.1 Manufacturing – significant changes ahead of current market players; decreasing importance 24

4.5.2 Custody and investment fund administration – transforming into sub-function, decreasing importance 25

4.5.3 Customers’ account administration and distribution – asset gathering opportunities resulting

from the EU accession and euro convergence, increasing importance 25

4.6 Sales and profitability issues – will investment managers remain profitable? 25

4.7 The future of the profession – what will the future bring to Hungarian investment management

professionals? 26

5 Conclusions 27

6 Appendix – List of investment management companies participating in the survey 28


2

Executive Summary

In the 1990s, Hungary privatised most financial services companies and developed a regulated industry, which

complied with the OECD and BIS requirements. Foreign ownership increased and is now commonplace among

the top players. Markets also became very concentrated during this process and have reached a phase of

consolidation. The investment management industry was no exception to this, because, among other things, most

investment managers were set up by a bank or an insurance company.

Assets under management of investment funds increased especially in the second half of the 1990s with most

money going into fixed income investment funds. Funds are predominantly sold through bank branches, which

give an edge to those managers who are owned by a bank and can make use of the proprietary branch network.

After 10 years of growth, the Hungarian investment management industry is at the crossroads of its development.

The key factors affecting its future shape are analysed in this study.

Firstly, accession to the EU will change the environment in which the Hungarian investment management

industry currently operates. The fundamental changes are, among other things, first introduction of a regulatory

level playing field. This means unrestricted access of EU products to the Hungarian market and of Hungarian

investment funds to the EU market. Accordingly, foreign domiciled investment funds can enter the Hungarian

asset management market and Hungarian funds can be sold within other EU member states.

The foreign investment managers with Hungarian banking subsidiaries will be winners, as they will be well

placed to target market segments on an international level and to distribute in Hungary a full range of their

existing and new foreign investment UCITS through captive distribution platform. The domestic investment

managers aspiring to distribute UCITS compliant Europe-based funds abroad will need to develop both the new

investment funds and secure appropriate distribution channels.

Second, there will most likely be an economic boost; Hungary’s economy can better exploit its comparative

advantages due to unrestricted access to the Single Market, resulting in above average GDP growth and wealth

creation. This could be good news for investment managers if they succeed to tap into this wealth. They are

supported in their undertakings by Hungary’s multi-pillar pension system, whose mandatory private pension funds

(second pillar) provides a constant inflow of assets to the fund industry. Should tax benefits applicable to

long-term savings instruments like pension funds and certain life insurance products be extended to investment

funds, this would further contribute to the growth of assets under management.

The eventual accession to the European Monetary Union (EMU), expected in 2008, will bring further significant

changes to the investment management market environment. Prior to accession, the Hungarian economy will

need to enter the convergence period needed to fulfil the so-called “Maastricht Criteria”. As a result, interest rates

will be below their current levels when Hungary changes to the euro. Adopting the euro will also eliminate

foreign exchange risk and improve price transparency. Parallel with this, the niche market of HUF-denominated

securities will also disappear then representing a significant challenge to the investment management profession.

Investment managers based in Hungary, which are subsidiaries of international banking, or insurance groups will

become much more operationally integrated with their foreign parent undertakings; they will be hereinafter called

“foreign investment managers”. Investment managers, which are subsidiaries of a Hungarian financial group, will

be hereinafter called “domestic investment managers”.


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As a consequence of the above, domestic investment managers will face more competition and Hungarian

investors will have more money to invest. Also, fixed income funds, the most important investment fund category

in the Hungarian investment management market in terms of assets under management, will become less

attractive compared to equity funds as their yields will decrease due to the lower interest rates.

Furthermore foreign exchange risks will be eliminated, taking away a disadvantage of foreign domiciled

investment funds.

The current protagonists of the highly concentrated Hungarian investment management market have different

positions when meeting these challenges. Almost all of the investment management players were founded by

banks or insurance companies and thus form part of financial services groups. The branch network of their parent

groups serves investment managers as an important distribution platform in a market where open architecture

hardly exists. All but one significant bank and insurance company in Hungary are foreign-owned, the exception

being OTP, a financial services group that dominates the market. As distribution of funds of foreign-owned

managers is controlled by their parent group, the decision on what product mix would be offered through these

channels will very much lie with these parent undertakings outside Hungary.

While foreign-owned managers who will become much more integrated with their parent undertakings can

benefit from EU accession by exploiting existing pan-European production platforms and investment fund ranges

of their parent groups, OTP and the other Hungarian owned players (domestic players) would need to introduce

new investment funds, especially equity funds, if they want to offer similar ranges. In the more competitive

market post accession, however, operational and financial effectiveness of investment managers will depend very

much on the size of assets under management, an area where investment managers operating in Hungary fall

behind their foreign counterparts. The great strength of the domestic players lies in their distribution power.

Foreign domiciled managers not yet present in Hungary and wishing to sell funds into this fast growing market

may need to use this power.

Consequently, the shape of tomorrow’s industry will depend on the reaction of the domestic players: whether

they will face up to competition, create new investment funds and improve operational efficiencies whilst

keeping distribution closed to third parties or whether they will not compete on manufacturing and rather open

up their distribution channels to benefit from the competition among foreign groups; or whether they will

continue manufacturing and open up their channels.


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1 Development of financial services & investment

management industry in Hungary

1.1 Financial services industry

As a result of the political and economic changes in the late 1980s the Budapest Stock Exchange (BSE) re-opened

on 21 June 1990. Its current market capitalisation amounts to EUR 40 billion (as at 31 May 2003) or 59% of GDP

(as at the end of 2002). In June 1999, the Federation of European Stock Exchanges (FESE) granted associate

membership to the BSE. In October 2001, the BSE advanced from its former status of associated member to a full

member of WFE, the Federation of International Stock Exchanges.

The financial services industry went through the restructuring and privatisation process in the first half of the

1990s, at the beginning of the economic reforms in Hungary. This process, combined with the introduction of the

new regulatory regime based on OECD and BIS framework, has resulted in a significant improvement of its asset

quality and capital adequacy.

The overall supervision of the financial services industry rested with the Pénzügyi Szervezetek Állami Felügyelete

– the Hungarian Financial Supervisory Authority (HFSA) in 2000. This was created through the merger of three

previously existing supervisory bodies (for banking and capital markets, insurance and pensions). HFSA became a

member of the International Organization of Securities Commissions (IOSCO).

The banking industry was the first to go through the privatisation and restructuring process and has now been

privatised to more than 90%. There is a high concentration in the banking sector of Hungary, with five banks

holding more than 60% of the total bank assets (OTP Bank Rt., K&H Bank Rt. – KBC, MKB Rt. – Bayerische

Landesbank, CIB Bank Rt. – Intesa BCI, HVB Rt. – HVB).

Development of the insurance industry followed. Concentration of the insurance market is high and similar to the

banking arena. It is dominated by multinational insurance groups (Allianz, Generali, ING, Aegon). OTP, however,

holds a strong position amongst insurers, as well.

In 1994 Hungary set up the third pillar of its three-tiered pension system and in 1998 the second pillar. Savings

held in voluntary and private pension funds grew continuously and stood at around 9% of total household

savings as at 31 December 2002.

The gradual development of the capital market in Hungary and the pension reform stimulated development

of the investment management industry on both the demand and the supply sides. The first investment

fund in Hungary, Creditanstalt Hungarian Securities Fund, was created in 1992. As it will be further analysed

in Chapter 2, the investment managers were primarily set up as subsidiaries of the banking or insurance

companies.

Except for the significant position of OTP in all sectors of the financial services industry, the rest of Hungarian

banks, insurance companies and investment managers are owned to a large extent by multinational groups

(usually subsidiaries of banking or insurance multinational groups with a presence in Hungary).


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1.2 Development of investment management industry in Hungary

Throughout the 1990s we could observe two stages of the development of the investment management industry

in Hungary: very slow growth from the beginning until 1996, and then quite a significant growth in the second

half of the 1990s.

Though the first fund in Hungary was set up in 1992, the industry took some time to take off due to, among other

things:

• a distribution infrastructure that had to be built up;

• the product offer that remained low until the second half of the 1990s;

• clients who were not yet aware of the concept of an “investment fund”;

• capital markets in Hungary and globally which picked up in the second half of the ‘90s;

• the Hungarian pension reform with its mandatory second pillar that was introduced in the second half of the

‘90s, resulting in additional fund inflows.

Growth in assets under management (AUM) of investment funds has amounted to 23% p.a. in recent years.

As at 31 December 2002 assets under management (AUM) of investment funds amounted to EUR 4.7bn

or EUR 349 per capita. This is still significantly less than the EUR 8,513 of AUM per capita in the EU15. The

difference in AUM per capita between Hungary and the EU countries is more pronounced than the difference in

GDP per capita (see graph).


6

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

1998 1999 2000 2001 2002 Source: Bamosz, FEFSI

The compound annual

growth rate (CAGR)

of Hungarian mutual

funds AUM between 31 December 1997 and

31 December 2002 was

23.4%

Hungary

EU

Growth Rate of AUM

The relatively low amount of AUM per capita in Hungary is due to “a wealth gap” between Hungary and the

EU15 in terms of: absolute level of wealth, wealth growth, and investment preferences of households, which (see

chapter 2) are driven by the attractiveness of equity investment funds versus fixed income investment funds, and

access to diversification and attractiveness of long term savings products.


7

Investment Fund AUM per Capita in EURO

64349

4,716

8,513

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1997 2002Hungary

EU15Source: FEFSI, Eurostat

GDP per Capita in EURO

3,970

6,453

19,420

24,000

0

5,000

10,000

15,000

20,000

25,000

1997 2002

EU

RO

EU

RO

Investment Fund AUM and GDP Per Capita

2 The Hungarian investment management

industry today

2.1 Regulatory environment – domestic products managed by domestic investment managers

The investment management industry is currently regulated by the Capital Market Code (Act No. 120 of 2001

amended effective from 1 January 2002) and supervised by the HFSA.

The original regulatory regime was grounded by the Act on Investment Funds (Act No. 63 of 1991), which

required the setting up of a local investment management company, only permitted to distribute domestic

investment funds. Regulatory developments of recent years have focused on aligning local regulations with EU

requirements. The Capital Market Code was an important step in that process, which meant to create

a comprehensive framework for the activities in the entire Hungarian capital market and has incorporated the Act

on Investment Funds. It has strengthened the requirements set for investment funds and fund managers introduced

new types of funds and allowed for registration and active, continuous distribution of foreign domiciled funds.

The new regulation, however, has not reshaped the market.

The Capital Market Code has been amended twice since its codification. The first set of amendments – effective

from 1 January 2003 – has further developed prudential guidelines and investor protection measures. The second

set of amendments has just been passed by the Parliament and is aiming to align regulation fully with that of the

EU with the view of the forthcoming accession (see more details in Chapter 3).

The current legislation and regulation is viewed as industry friendly by the interviewed managers and to a large

extent as already EU-aligned.

The current tax regime does not appear to constitute a development constraint. The taxation of income from units

of domestic and of locally registered foreign investment funds is similar and in both cases income is treated as

interest income. Income from foreign funds, which are not registered (hence not actively distributed) in Hungary

on the other hand is treated less favourably. It would be desirable to recognise investment funds as long-term

savings instruments and grant individual investors investing in them a tax regime comparable to investments in

pension funds and certain life insurance products.

2.2 Investment funds – mostly fixed income investment funds to retail clients

Until 1 January 2003, the Hungarian market was protected in terms of product development and only domestic

investment funds were allowed to be distributed.

The investment management business has been only a very much retail business until now with hardly any

institutional investors. About 78% of AUM in investment funds came from individual investors as at the end of

2002, although this ratio is gradually decreasing and we can observe an increasing appetite from corporate

investors and pension funds.

The investment preferences of Hungarian investors seem to follow a traditional pattern. First, Hungarians used to

invest in deposits with banks. After a decrease in interest rates, investors sought money market funds or fixed


8

income funds as an alternative form of investment (current stage of investment preferences). As the wealth of

households increases they are expected to invest more in balanced investment funds.

Until now, individual investors tended to be risk averse, preferring traditional banking products and fixed income

investment funds and typically invested on a short-term basis.

These preferences were supported by the relatively high Hungarian forint (HUF) interest rates and the recent low

domestic and international capital market valuations, which made equity investments unattractive.

This resulted in an overwhelming dominance of fixed income funds (87% of AUM): bond funds constituted 68%

of AUM, followed by money market funds with 19% of AUM. The Hungarian fund market has a much higher

share of fixed income assets than the EU15 market (51.9% of AUM).

Comments from the interviewed managers suggest that the effectiveness of distribution channels is a key success

factor for product development. “Fit to investment culture” and “attractive yields” are also significant factors.

Failure of product development is usually associated with an ineffective distribution.

2.3 Market players

The investment managers were generally set up as subsidiaries of banking or insurance companies.

As discussed earlier, the original regulatory regime required foreign investment managers (usually subsidiaries of

banking or insurance multinational groups with presence in Hungary) to set up an investment management

company in Hungary and to only distribute domestic investment funds.

There are currently over 20 investment managers operating in Hungary. The top five investment managers

dominate the Hungarian marketplace in terms of AUM, managing almost 93% of the total Hungarian AUM (as at

31 December 2002).


9

Hungarian AUM by Asset Class as at 31 December 2002

8.6

68.4

3.5

19.1

0.5

Balanced

Bond

Equity

Money

Market

Other

Source: Lipper

European AUM by Asset Class as at 31 December 2002

8.7

28.3

30.9

3.5

23.6

2.2

Balanced

Bond

Equity

Fund of

Funds

Money

Market

Other

Investment Fund Market Structure Split by Asset Class

OTP itself manages more than half of the assets and also dominates the pension market. It is the only Hungarian

investment manager amongst the top 5 players. The remaining four are subsidiaries of foreign investment

managers.

The investment fund portfolios of the top investment managers are similar since bond and money market funds

are considered as fixed income funds (consisting mainly of government paper, small proportion of mortgage

bonds and of bank deposits, and virtually no corporate exposure).


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Market Concentration in Hungary - Top 5 Fund Managers' Market Share of AUM

18.9%

8.7%

5.5%

2.8%

13.2%

51.0%

Source: PwC

OTP

Budapest (GE)

K&H Általános /ABN AMRO

CA IB

CIB (Intesa-BCI)

Others

Hungarian Mutual Fund Market. Market Concentration – Top 5 Players

Asset Composition of Top Hungarian Players

94.0%

67.0%

31.7%29.6%

6.3% 7.3%13.4%

26.4%

56.2%61.1%

0.8%

0.3%0.6%5.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OTP Budapest IM ABN

AMRO/K&H

CA IB Securities

IFM

Source: Bamosz 31/12/2002

Equity

Balanced

Bond

Money

Market

Hungarian Mutual Fund Market. Asset Composition of Top 5 Players

2.4 Asset management value chain

Investment managers in Hungary are typically subsidiaries of domestic or foreign banking or insurance groups.

Foreign investment managers had to set up an investment management company in Hungary for regulatory

requirements.

This was also economically justified as they, until recently, could only offer domestic investment funds, which

invested in Hungarian domestic equity and HUF fixed income investment funds.

Investment managers in Hungary are first of all and only manufacturers. They develop investment funds, deal

with portfolio construction and asset allocation. Research activities are usually of a limited size and performed

in house. In terms of human resources, most of the investment managers employ between 10-15 people.

In certain management functions they often rely on or share resources with other parts of their financial services

group.

Custody and investment fund administration are performed by a separate custodian. However, a custodian may

be a related party to an investment manager. An investment management company owned by a banking group

usually employs the parent bank as the custodian.

Customers’ account administration is performed by the broker or the dealer, who also mediates the sale of

investment certificates between the investors and the fund manager. The broker/dealer may be a related party to

an investment manager. Distribution is often performed through captive banking distribution channels, which are


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• Sales

• Marketing

• Customer relationship

management

• Distribution agent

IM not owned by a bank

ManufacturingCustody

Product administration

Customers’ account

administration

• Product

development

• Research

• Asset allocation

• Portfolio

construction

• Trading

• Safe keeping of assets

• Clearing and settlement

• Portfolio maintenance

• Valuation of product

• Legal administration of

product

• Customers’ account

maintenance

• Customers’ trade

processing

• Customer reporting

Activities

IM owned by a bank

• Investment manager

Distribution

• Investment manager




• Custodian

• Custodian

= In-house service provision = Third party service provision = I-h or 3rd P service provision

Asset Management Value Chain in Hungary

usually closed to third parties. Retail branches actually constitute the most significant distribution channel.

Stockbrokers and private banking are additional distribution channels.

At present, in cases where investment managers are owned by banks, the whole asset management value chain is

performed by the same financial group. Investment managers owned by insurance companies employ financial

advisers for distribution and engage third party service providers for the other sections of the value chain.

Domestic competition and the effectiveness of distribution channels are seen as the key competitive factors

associated with investment management in Hungary. Exchange rate movements and interest rate volatility are

generally viewed as less important factors.

2.5 The income pattern of the asset management value chain in Hungary

Units in investment funds are usually acquired through distribution agents. Investors transfer the investment

amount plus the front-end load to the distribution agent (1). When investors redeem their fund units, the

distribution agents receive the redemptions proceeds from the fund and will transfer this amount minus the back

end load (2) to the investor (7). Apart from transferring investment amounts and redemptions proceeds between

the investors and the fund, the distribution agent is also in charge of keeping the investment accounts and

other transfer agent activities for which the distribution agent receives an account maintenance fee from the

investors (6).

The fund usually pays a management fee, which includes fees for administration services, to the investment

manager who usually also acts as the fund administrator (4) as well. A part of the management fee is retrocede by

the fund to the distribution agent (8). In some cases a performance fee is paid to the investment manager (5).

Furthermore the fund pays custody fees and transaction fees to the custodian (3).


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Fund

Investor

Distribution Agent

Custodian

Investment amount+

1) Front-end Load

8) Retrocession of Management Fee

3) Custody Fee

& Transaction

Fee

Investment amount

Redemption proceeds

6) Account Maintenance

Fee

5) Performance Fee

4) Management

Fee net of

retrocession (incl. Administration

Fee)Investment

Manager cum Administrator

7) Redemption proceeds minus Back-end Load (2)

Typical Income Patterns of the Asset Management Value Chain in Hungary

2.5.1 Average fee levels in Hungary

The table below shows the average fee levels per asset class of the seven major fund companies active in

Hungary.

In Hungary, the front-end load and the back-end load are fixed in HUF amount (almost without exception),

ranging from HUF 0 to HUF 500 (EUR 2) for front-end load and from HUF 0 to HUF 1000 (EUR 4) for the

back-end load.

The custody fee in Hungary ranges from 8 basis points (bp) to 20 bp for fixed income funds, from 9 bp to 25 bp

for balanced funds, and from 9 bp to 38 bp for of equity funds.

The management fee ranges from 20 bp to 250 bp for money market funds, from 140 bp to 150 bp for bond

funds, from 150 bp to 175 bp for balanced funds and from 150 bp to 200 bp in the case of equity funds.

2.5.2 Average fee levels in the EU15

In most of the EU15 countries, the front-end load and the back end load are expressed as a percentage of the

amount invested or redeemed respectively. The average front-end load for the major EU15 countries is 100 bp for

money market funds, 250 bp for bond funds, 300 bp for balanced funds and 400 bp for equity funds.

Money market funds typically do not have a back end load while bond funds, balanced fund and equity fund

have an average of 50 bp back end load.

The average custody fee of EU15 domiciled money market funds is 5 bp and roughly 10 bp for bond, balanced

and equity funds.

The management fee in the EU15 varies from an average 60 bp for money market funds to 100 bp for bond

funds, 125 bp for balanced funds and 150 bp for equity funds.


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Average Fee Levels Per Asset Class of Hungary Funds

Average Fee Level per Fund Category

Fee Money MarketBond Funds

Balanced EquityFunds Funds Funds

1) Front-end Load HUF 171 HUF 243 HUF 200 HUF 200

2) Back-end Load HUF 493 HUF 550 HUF 558 HUF 642

3) Custody Fee 11 bp 12 bp 13 bp 19 bp

4) Management Fee 139 bp 147 bp 155 bp 183 bp

(incl. Administration)

2.5.3 Analysis of the differences in the Hungarian and the EU15 fee structures

A striking difference between the Hungarian and the EU15 fee structures can be observed in the case of the front-

end load and the back end load. A very low fixed fee in Hungary is contrasted by a percentage based, rather high

fee level, especially for the front-end load, in the EU15. Also, while in Hungary the average front-end load is

lower than the back end load, the contrary holds true in the EU15.

While the custody fee for bond funds and balanced funds is similar in both markets, Hungarian money market

funds and equity funds pay on average 100% and 60% respectively more in custody fees than do EU15

domiciled funds of the same categories.

When analysing the management fee levels in both markets, it is striking that in Hungary the management fee

hardly changes between the asset categories. The average management fees for money market funds, bond funds

and balanced funds do not differ very much while that for equity funds it is a bit higher. However, the difference

between the average management fee of money market funds and that of equity funds is a mere 44 bp. This

difference amounts to 90 basis points for European funds. To sum up, it can be said that in Europe the average

management fee levels per category are not only lower than in Hungary, but vary more according to asset

category.


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3 The implications of the EU accession

3.1 Regulatory alignment to allow an inclusion into pan-European distribution, and providing

for a level playing field

As Hungary accedes to the European Union it is expected to adopt all relevant EU legislation.

Two new EU directives concerning investment funds (together commonly known as UCITS III) came into force

with their publication in the Official Journal of the European Communities on 13 February 2002. Member States

have to implement UCITS III in their national laws prior to 13 August 2003, and have until 13 February 2004 to

effectively apply theses measures.

The new consolidated Capital Market Code has been amended in June 2003 in order to fully incorporate the

requirements of the UCITS III Directive and to meet the above mentioned transition deadlines. The amendments

became effective on 1 July 2003, apart from some provisions relating to the cooperation between the respective

financial supervisory bodies of the EU countries and the European Commission.

The key areas where changes to the Capital Market Code were made are detailed below.

3.1.1 Products

The legislation has retained the types of investment funds introduced on 1 January 2002. However, the recent

amendment further specifies the investment objectives and limits the different types of investment funds. The

changes focus primarily on the so-called “Europe-based investment funds”.

Following the second, above mentioned amendment investment and management rules of the already existing

Europe-based investment funds became aligned to comply with the provisions of the UCITS III Directive.

Accordingly, these will be in a position to benefit from the EU passport for investment funds once Hungary is a

member of the EU, helping to create a level playing field in terms of cross border distribution of investment funds

with the European Union. Existing domestic funds have not been created as Europe-based investment funds and

investment managers would have to actively convert these should they wish to benefit from the EU passport.

3.1.2 Investment management activities, authorisation

Rules pertaining to investment managers and investment management activities have not significantly changed.

The only important change is the specific regulations to the managers of Europe-based investment funds.

Investment managers managing Europe-based investment funds can be authorised to perform activities in addition

to those originally specified by the law (mainly fund management and portfolio management services), namely

custodian services. They shall employ proper risk management techniques and reporting practices covering, but

not limited to, managing derivative positions. Once compliant with the relevant requirements, managers of

Europe-based investment funds can benefit form the EU passport of their products in terms of cross-border

distribution.


15

In case of foreign domiciled investment funds regulated by the UCITS III Directive within an EU member state, no

separate license will be required from HFSA as long as the investment manager holds the appropriate license

from the EU member state’s supervisory body. EU licensed investment manager will neither need a license to

establish a branch office.

3.2 The EU accession boost

The first set of economic reforms (covering trade and price liberalization, privatisation of manufacturing and

financial services industry) had been broadly completed by 1997. Now, Hungary is in an advanced phase of its

economic program, currently focused on restructuring small and medium enterprises and providing structural

assistance to underdeveloped regions.

Together with the processes of privatisation and restructuring and employment of required know-how, this has

enabled Hungary to transform its economy into a market economy, with Hungarian companies well integrated

into global business.

Average real GDP growth since 1997 was strong, at an annual rate of 4.5%. Despite a slowdown in 2001 and

2002 (consistent with global tendencies) its growth was expected to reach 3.5% in 2003. It is believed that

Hungary will be able to sustain growth rates of around 4% in the medium term.

Hungarian based companies are well integrated into global businesses. Multinationals’ subsidiaries in Hungary

account for about 75% of Hungarian exports and 33% of its GDP. Domestic businesses are already accustomed

to compete with foreign companies at home.


16

0

1

2

3

4

5

6

1998 1999 2000 2001 2002 2003 2004

GD

P g

row

th r

ate

Euro area

Hungary

Source: OECD, 2003 and 2004 forecasted

GDP Growth Rates

Structural funds from the EU could provide a significant boost in Hungary. Further incentives for growth can

come from the implementation, started in 2001, of the “Széchenyi Plan”, a medium term national economic

development plan aimed at development of transport and tourism infrastructure, small and medium enterprises,

and structural development of the Eastern regions.

The Hungarian economy is well positioned to meet the challenge of the EU accession.

The EU accession will contribute to the economic growth through further stimulus to trade and capital flows as

well as income transfers from structural funds. Enlargement is expected to accelerate the annual growth of GDP

in candidate countries by 1 to 1.8%.

Increased economic activity and growth resulting from the EU accession will over time put more money into

people’s hands and will increase financial wealth of households.

Already now, over the last couple of years the growth of the financial wealth was significantly higher in Hungary

than in the EU12.

Nevertheless, there is still a huge gap in terms of financial wealth per capita between Hungary and the EU12. As

at 31 December 2002 financial wealth per capita in Hungary was equal to 6.8% of that within the EU12, though

it had increased from the 3.6% as at 31 December 1997.


17

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1998 1999 2000 2001 2002

Hungary

EU12

Source: Hungarian National Bank, ECB; Hungary: households (S.14); ECB figures

include government S.13, non-finacial corporations (S.11), households (S.14) and

non-profit institutions serving households (S.15)

EU

RO

Growth Rate of Financial Wealth

As living standards are still relatively low when compared to the EU, most of the additional wealth will probably

be spent on consumption as long as Hungary is in a catching-up phase.

Once this phase is coming to an end, more and more households will be in a position to invest their increasing

wealth into financial assets rather than material assets. This will certainly have a positive impact on the

investment management industry.

3.3 The euro convergence

Euro convergence means the process of bringing certain macroeconomic indicators in line with the levels

required in the Maastricht Treaty for an economy to become eligible for adopting the Eurocurrency. The so-called

Maastricht Criteria focus on a nation’s budget deficit, its debt, inflation rate and long-term interest rate.

The Maastricht Treaty criteria are as follows:

• the budget deficit should not exceed 3% of GDP;

• the national debt should not exceed 60% of GDP ;

• the inflation rate should not differ by more than 1.5% from the average of the three lowest inflation rates in

the European Monetary Union (EMU) and;

• the long-term interest rates should not differ by more than 2.0% from the average of the three lowest

long-term interest rates within the EMU.

There will be an obligatory period of two years in which the Hungarian forint will need to join the Exchange Rate

Mechanism (ERM) before accession to the European Monetary Union (EMU) (though this is not automatic).

Currencies taking part in the ERM may not fluctuate by more than 2.25% around a set parity with the Euro.


18

1,766 4,331

48,723

64,014

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1997 2002

Hungary

EU12

Source: Hungarian National Bank, ECB; Hungary: households (S.14); ECB figures

include government S.13, non-finacial corporations (S.11), households (S.14) and

non-profit institutions serving households (S.15)

EU

RO

Financial Wealth Per Capita

The European Central Bank (ECB) ruled that Hungary, in a similar manner to the other nine acceding member

states, might start to join the ERM only upon becoming member of the EU.

The Hungarian forint is pegged to the euro in a fluctuation band of +/- 15%; the recent change in the ERM

fluctuation band from +/- 15% to +/- 2.25% will require a significant alignment process.

However, Hungary currently targets 2005-2006 for entry into the ERM and 2008 into EMU. With the entry,

foreign exchange risks on trade between Hungary and the EMU countries will be eliminated and price

transparency will increase. Thereby, EMU membership will facilitate the exchange of goods and services between

Hungary and the other EMU countries.

The Hungarian government realizes that reaching the Maastricht Criteria would probably be impossible by 2005

when the measurement would take place, and would certainly be detrimental to economic growth. For Hungary,

budget deficit and inflation will be the key issues.

Source: Deutsche Bank Research 2002

The main aim of the Maastricht Criteria is to ensure that member states of the monetary union adopt an economic

and fiscal policy that controls inflation and keeps it at reasonably low levels. As a result of low inflation, central

bank interest rates can be kept at relatively low levels.

With the increase in attractiveness of equity investment funds and the elimination of foreign exchange risks after

entry into the EMU, the appetite of Hungarian investors for foreign domiciled (and euro-denominated) equity

investment funds will increase.


19

Growth and Stability Pact Criteria and Situation in 2001

Criterion Inflation Interest Forex Rate Deficit Debt 20012001 in % Rate 10Y in % Deviation in % 2001 in % in %

Reference Value 3.3 7.4 +/-2.25 -3.0 60.0

Hungary 8.5 7.0 -4.4 -3.2 64.4

Poland 5.6 8.3 -8.2 -4.0 38.0

Czech Republic 4.7 5.6 -5.5 -3.2 29.0

4 The Hungarian investment management industry

tomorrow

4.1 International comparison

When analysing the potential future development patterns of the Hungarian investment management industry,

international examples of some EU countries can serve as a benchmark to test our ideas. Comparison to other

member states (specifically those, which were admitted to the EU recently) however is difficult and may not be

conclusive. The following points make the Hungarian situation unique in this sense.

The financial services industry of those countries, which are comparable to Hungary by virtue of either their size

(Austria, Portugal) or their relative level of developments (Spain, Greece, Portugal) has been and still is dominated

by domestic banking groups. The alternative of international integration of product development, administration

or any other part of the investment management value chain within the financial group does not exist for them,

which is a clear difference between Hungary and other EU countries.

The Hungarian market is – with the exception of OTP and some relatively small players – owned by international

groups, who run their own investment management arms. As a consequence, establishment of a

pan-European platform that can leverage off the group’s experience, product set, cost efficiencies, etc. is a valid

option for them.

The first half of the 1990's was very much the early stage of the investment management industry developments

across the EU. Spectacular growth trends were not only reflective of this, but also coincided with an optimistic

and booming capital (equity) market. Therefore, the development patterns of those countries that were admitted

to the EU during that period may not be followed by the countries expecting admission now.

In terms of products and assets under management, individual country reports on the investment management

industries suggest that foreign domiciled funds have not really broken through in any of these EU markets and

domestic domiciled funds dominate the markets. The key question is whether the financial groups currently

dominating the Hungarian market (with the exception of OTP) will act differently and would, through

streamlining their product mix and operations, gradually replace domestic funds with foreign domiciled funds.

The views expressed below try to assess this possibility.

4.2 Market players – gradual changes in business strategy

As discussed above, the EU accession will first provide a level playing field between domestic and foreign

investment managers through the regulatory alignment. The distribution of foreign investment funds in Hungary

will be possible and foreign managers will include Hungary in their pan-European distribution platforms.

Through the accession boost and the euro convergence, including the disappearance of certain foreign exchange

risks in the medium term, the EU accession will contribute to wealth creation and will gradually shift investment

preferences towards equity investment funds and towards international equity investment funds

(see also chapter 3).


20

Two new groups of market players will emerge. One group will be investment managers based in Hungary,

which are subsidiaries of international banking or insurance groups and which will become much more

operationally integrated with their foreign parent undertakings. The other group will be investment managers,

which are subsidiaries of Hungarian financial groups.

4.2.1 Domestic investment managers

The distribution of foreign investment funds will not have an immediate but rather a gradual impact on the

current scope of activities and business of domestic investment managers.

Domestic investment managers have a local, established distribution network (primarily retail bank distribution),

which is difficult and expensive to penetrate or to build alternative channels to reach customers. Access to

distribution will constitute their clear advantage in the immediate future.

Investment funds offered to the investors need alignment to the domestic investment preferences, which at

present are focused on low risk, short term and fixed income investment funds. Also, language, forming the base

of the domestic corporate identity and customer loyalty, will remain a key in accessing Hungarian investors.

In the period of converging interest rates and yields, the Hungarian forint market – small as it is – provides a

reliable source of income to domestic investment managers who have developed their special expertise to deal in

these assets.

As discussed in Chapter 3, as yields attainable on the local market converge to those of the EU, international

equity investment funds will become more “competitive” in the eyes of the local investors, also because domestic

investment managers may not have sufficient expertise in international equity.

As the ultimate step, the joining of the EMU and the disappearance of HUF as a currency will create a new

playfield, within which the local reach will be important for distribution, but where local manufacturing will lose

its significance.

Once competing with euro denominated investment funds, efficiencies and cost ratios will become more

important and size will begin to matter. Then, they will need to revise their business strategy: to identify and

focus on niche investment funds and focus on strengthening distribution.

4.2.2 Foreign investment managers

For foreign investment managers Hungary’s entry in the EU will offer asset gathering opportunities, prospective

growth due to catch up effect, potential relocation of domestic assets towards equity investment funds and

international securities.

These factors will be counterbalanced by the small size of the Hungarian market, and relatively small size of an

average household wallet, current bear market and costs pressures on the EU asset managers.


21

The foreign investment managers will have the following strategic priorities:

• Concentration of manufacturing at a regional level (e.g. CEE) at the expense of domestic manufacturing;

• Streamline the investment fund range (avoiding duplication between domestic and foreign investment funds),

using a common administration platform;

• Expansion of retail distribution network via proprietary and third party channels.

4.3 Investment funds – will foreign investment funds become a threat?

As previously stated, in the first instance the regulatory alignment with the EU UCITS III Directive will allow a

distribution of UCITS in Hungary and will include Hungary in the pan-European distribution platform.

It will establish a level playing field between foreign and domestic investment managers in terms of product

development. As it will be further discussed later on, changes in strategy and activities of investment managers

will occur.

For foreign investment managers, whether they will be subsidiaries of banking or insurance multinational groups

with presence in Hungary or new entrants, it will be possible to distribute their foreign investment funds in

Hungary in a similar manner as they distribute them in other EU countries.

Furthermore, as discussed in chapter 3, a gradual increase of household financial wealth will increase investors’

appetite for investment funds and euro convergence will further develop investment preferences towards equity

investment funds.


22

With the limited size of the domestic equity market and elimination of foreign exchange risk following Hungary’s

joining the EMU the investment preferences are likely to move towards international investment funds. Looking

over the border into the Czech investment management market where foreign funds could have been sold since

the early 1990s, it can be observed that foreign funds already account for almost 20% of AUM.

This constitutes good news for foreign investment managers. Should this scenario crystallize in Hungary, the

foreign investment managers will be in a position to distribute a full range of their existing and new foreign

investment UCITS, manufactured centrally by them from their existing administration platforms, and shall gain

economies of scale from pan-European product development and administration.

This will still require alignment with the local culture and local reach but now more focus will be placed on the

distribution function of an asset management value chain.

However, it will constitute a challenge for domestic investment managers.

The relatively small size of the domestic capital market (market capitalization amounted to EUR 40 billion as at

31 May 2003), lack of international reach and expertise in international equities, lack of efficiency due to

relatively small size and pressure on product innovation are likely to put domestic investment managers into

comparative disadvantage.

They are likely to face a dilemma whether to compete with foreign investment managers or to focus their

activities on niche investment funds. The latter will probably prevail, according to the interviewed domestic

managers. They may develop their niche expertise in small cap domestic equity, private equity or real estate

investment funds.

4.4 Changes in distribution methods – will distribution channels become opened to third parties?

Access to distribution will remain the key factor for the development of investment management industry in

Hungary.

The investment managers already present in Hungary as well as new entrants will desire to increase their

distribution capacities to be well positioned to benefit from asset gathering opportunities increasing post EU

accession.

Retail branches will remain the most important distribution platform for some time to come.

It will place investment managers who are subsidiaries of banks and have an exclusive access to such network

(with OTP leading in this category) in an advantageous position.

The foreign investment managers with Hungarian banking subsidiaries will be winners, as they will be well

placed to distribute in Hungary a full range of their existing and new foreign investment UCITS through captive

distribution platform.

The domestic banks will face a dilemma – whether to keep a distribution platform closed to support their

subsidiary investment managers or whether to open it to third party investment managers.


23

4.5 Changes in investment management value chain – how and where to compete in the investment

management value chain?

This will result in some changes in asset management value chain. The interviewed investment managers

believed that post EU accession the Hungarian investment managers will survive, although their activities will be

reduced.

4.5.1 Manufacturing – significant changes ahead of current market players; decreasing importance

Changes in investment fund offering (balance between domestic and foreign investment funds as well as the mix

of the investment funds) will naturally bring significant changes in manufacturing function of asset management

value chain.

In terms of foreign investment managers based in Hungary, it is very likely that a production of international

investment funds will be performed by their parent investment managers and will move out of Hungary.

There might be some regional concentration of manufacturing Central and Eastern Europe equity investment

funds and HUF fixed income (until joining the EMU). This will however depend on the overall philosophy and

operational manufacturing style of a foreign investment manager.

Accordingly, the activities of foreign investment managers based in Hungary will gradually be limited to HUF

fixed income and domestic equity and may disappear eventually post euro convergence.


24

• Sales

• Marketing

• Customer relationship

management

ManufacturingCustody

Product administration

Customers’ account administration

• Product

development

• Research

• Asset allocation

• Portfolio

construction

• Trading

• Safe keeping of assets

• Clearing and settlement

• Portfolio maintenance

• Valuation of product

• Legal administration of

product

• Customers’ account

maintenance

• Customers’ trade

processing

• Customer reporting

Activities

Investment managers‘ activities limited to

HUF fixed income

and domestic

equity

Distribution

Distribution agent– opening platform

for off-shore funds

and third party

products

Distribution agent– opening platform

for off-shore funds

and third party

products

Custodians’ activities limited to

custodian for

domestic products

and subcustodian

for off-shore funds

= In-house service provision = Third party service provision = I-h or 3rd P service provision

Asset Management Value Chain in 5 to 10 Years

This will constitute a challenge for the domestic investment managers. Will they manage to compete with foreign

investment managers in terms of international equity or foreign fixed income? Will they manage to develop

international equity experience and keep the speed of product innovation to survive in the market?

The manufacturing function of the domestic managers will be gradually reduced after the EU accession to

domestic equity and HUF fixed income, and then after joining EMU to some niche investment funds, like small

cap equity, private equity or real estate investment funds.

4.5.2 Custody and investment fund administration – transforming into sub-function, decreasing importance

The custodian function will also likely be reduced. The Hungarian custodians will remain to fulfil their function

for domestic investment funds as well as they will act as sub-custodians for foreign domiciled investment funds in

terms of domestic equity and HUF fixed income.

In the longer term they are likely to open their services to third parties and emerge as independent players in

asset management value chain. The custody services market is likely to consolidate to remain competitive on the

open level playing field.

4.5.3 Customers’ account administration and distribution – asset gathering opportunities resulting from the EU

accession and euro convergence, increasing importance

An effective distribution is seen as the key success factor for investment fund industry development in Hungary.

The importance of customers’ account administration and distribution functions will increase in line with the

increased asset gathering opportunities resulting from the EU accession and EMU entry.

The foreign investment managers are likely to expand the sales capacities to benefit from these asset-gathering

opportunities.

The comparative advantages of the Hungarian investment managers: ethnic background, Hungarian language

knowledge and culture, domestic presence and relationship will place them well to play an increasing role in

client relationship and sales activities.

4.6 Sales and profitability issues – will investment managers remain profitable?

The difference in the remuneration of distribution channels in the Hungarian and EU fee structures as discussed

in chapter 2 points at differences in the current distribution model in both markets.

Remuneration in the EU is considerably higher than in Hungary and depends on the amount invested.

Distribution agents in the EU are thereby motivated in their asset collection efforts. Hungarian distribution agents

do not have the same incentives.

The structure and the level of the front-end load and the back-end load in Hungary is to a certain degree a

reflection of the low importance of third party distribution and independent financial advisors as distribution


25

channels. Both, front-end load and back-end load are important sources of income for independent financial

advisors in the EU. In the European Union both fee types are usually levied as a percentage (up to 7% for

front-end load) of the invested amount and can thus be considerable. In Hungary, front-end load and back-end

load are fixed, low fees (single digit euro amounts) and too small to serve as income.

With changing distribution patterns, the front-end load and back-end load need to reflect these changes and

eventually become more aligned with those common in the EU.

The rather high levels of custody fees in the case of money market funds and equity funds could be a sign of

inefficiencies, lack of competition or lack of economies of scale on the side of the service providers in Hungary if

compared with the EU. Higher competition from foreign players following the EU accession may force the

Hungarian players to reduce custody fee levels and more towards higher efficiencies in their custody operations.

Management fees in Hungary are higher on average in Hungary than in the EU. This is especially true for money

market funds and bond funds, the most popular fund categories in Hungary. While interest levels, and thus fund

yields, are high, the effects of high management fees on fund performance for these two categories have less

impact. As interest rates come down in conjunction with the conversion to the euro, the burden of high

management fees will increase and make these fund categories less attractive for investors. Similar to the case of

the custody fee, increased competition from foreign players may eventually force domestic players to lower the

management fee levels of their main investment fund range. This will probably lead to a more consistent pricing

structure

Reducing annual fees like the custody fee and the management fee will result in pressure on domestic players’

profitability. The impact of this pressure will depend on the degree of competition from foreign players. However,

if domestic players do not prepare themselves for the increased competition, they will play the passive part in this

game, becoming subject to decisions made by the foreign competition.

4.7 The future of the profession – what will the future bring to Hungarian investment management

professionals?

The future development of the Hungarian investment management industry will, no doubt, have an impact on the

profession itself and gradually change the profile of those working in this market. The projected changes are

expected to lean towards distribution, though they will be gradual and – for the whole market – probably not

dramatic. Likely scenarios include the following.

Product development for multinational companies may be concentrated on the pan-European level, or regional

centres may develop. Whilst local, Hungarian investment managers may be well trained, they would probably

lack international experience (e.g. with European equity markets) and therefore shall be flexible and prepare for

this move. For employees of foreign-controlled financial groups, it is possible to experience a period of selecting

and training the right professionals in the areas of portfolio development and management functions, which

should be considered as an opportunity.

Distribution is key and will become more important. Skills in customer relationship management, segmentation,

marketing are to be further developed. Many investment managers interviewed admit that they may fall short on

this front. Also, in this respect, such efforts tend to require coordination with and buy-in from the

banking/insurance group of the investment manager. On the other hand, the aforementioned skills are all the


26

more important for the small, independent Hungarian investment managers, who will try to retain and develop

their niche customer segments.

Other functions within the value chain (administration, custody, etc.) will probably be more competitive and – as

the market grows – proven efficiencies will decide who can dominate the market, though it does not necessarily

mean substantial growth in the number of people employed, but should mean significant development of

qualities over the years.

Pan-European or regional concentration of certain functions (e.g. back-office) may be an option for all

multinational groups – the relative effectiveness and cost of such procedures in Hungary will be a determining

factor whether this could be concentrated in Hungary for any of the groups. On the other hand, such decisions

will also depend on the general business strategies of the financial services groups and as such, can be hardly

influenced by local professionals.

5 Conclusions

When analysing the consequences of Hungary’s accession to the EU and the EMU for the Hungarian investment

management industry, a distinction must be made between the domestic Hungarian investment managers and

foreign investment managers.

Domestic investment managers will face considerable challenges due to Hungary’s integration into the EU and

the monetary union. Foreign competitors can offer a more diversified investment fund range at better prices and

investors’ preferences are likely to turn away from fixed income to equity, an investment category in which

domestic managers do not yet have a lot of expertise. However, foreign investment funds will become a serious

threat probably only after accession to the monetary union, giving domestic players a grace period. Furthermore,

distribution, which will be a key success factor, is currently dominated by domestic managers group.

Foreign investment managers will benefit from existing pan-European investment fund ranges and structures. This

is especially true for those foreign groups, which already own a Hungarian financial institution as this provides

them with access to an important distribution channel. Foreign groups not yet present in Hungary need to

evaluate the benefits of entering a growing but relatively small investment management market and the cost of

acquiring or setting up a distribution network in an environment of “closed architecture”.

The first key question for the future shape of the Hungarian investment management industry is whether domestic

investment managers will be willing and capable to compete on manufacturing. They could do this alone or in

partnership with foreign investment managers. Their decision will determine whether fund manufacturing will

exist in Hungary in the long run.

The second key question is whether or not there will be an open architecture. Foreign managers owning a

financial institution in Hungary will try to benefit from existing proprietary pan-European investment fund ranges

and proprietary domestic distribution channels. They are not likely to open up to third party distribution in the

short to medium term. Foreign managers not yet present in Hungary may shy away from the costs of building or

acquiring a distribution network.


27

This puts the key to the future shape of the Hungarian investment management market in the court of the

dominant domestic players. Will they face up to competition and create new investment funds and improve

operational efficiencies while keeping distribution closed for third parties? Or will they not compete on

manufacturing and rather open up their distribution channels and benefit from the competition among the foreign

groups? Or will they do both?

6 Appendix – List of investment management

companies participating in the survey

In Hungary:

Access Befektetési Alapkezelô Rt.

Budapest Alapkezelô Rt.

CAIB Értékpapír Alapkezelô Rt.

CIB Befektetési Alapkezelô Rt.

Concorde Befektetési Alapkezelô Rt.

Erste Bank Magyarország Befektetési Alapkezelô Rt.

Európa Befektetési Alapkezelô Rt.

Europool Befektetési Alapkezelô Rt.

Generali Alapkezelô Rt.

ING Befektetési Alapkezelô Rt.

K&H Értékpapír Befektetési Alapkezelô Rt.

MKB Befektetési Alapkezelô Rt.

OTP Alapkezelô Rt.

Quaestor Befektetési Alapkezelô Rt.

Raiffeisen Befektetési Alapkezelô Rt.

Reálszisztéma Befektetési Alapkezelô Rt.

Trust Befektetési Alapkezelô Rt.

Abroad:

HVB-Activest

ING Investment Management

Pioneer Investments New Europe Division

Raiffeisen Fund Management

Union Asset Management Holding


28

For further information, please contact:

PricewaterhouseCoopers

Dariusz NowakPartner

PricewaterhouseCoopers, Zagreb

Phone: (385) 1632-8840

E-mail: [email protected]

Árpád BalázsSenior Manager

PricewaterhouseCoopers, Budapest

Phone: (36-1) 461-9163


Markus SchwambornSenior Advisor

PricewaterhouseCoopers, Luxembourg

Phone: (352) 4948-48-2142


BAMOSZ

Gyula FatérPresident

Phone: (36-1) 450-7262


Péter HoltzerMember of the Board

Phone: (36-1) 486-6519


PwC Bamosz 2003

Documents

Transcript of PwC Bamosz 2003