Mercer Germany has started approaching clients across the DACH region with a joint consultancy offering developed in partnership with Vienna-based SLG Treasury.
The two firms entered into a strategic partnership earlier this year to advise corporates on treasury strategies to finance, structure or restructure pension liabilities, as well as on asset management and global research.
“Corporations in the DACH region look for partners to manage pensions and for treasury tasks, therefore, for us made sense to build the partnership to offer solutions to companies to cover the broad spectrum of their challenges across treasury and pension asset management,” Michael Sauler, head of wealth at Mercer Germany, told IPE.
The funding of pension liabilities within de-risking strategies is a central focus of the collaboration. SLG Treasury identified synergies with Mercer’s pension and asset management solutions.
“Our clients’ demand for broader consulting services, particularly in the area of pensions, is an expertise we previously did not offer. We start talking with potential clients in the next weeks,” said Philip Tüttö, managing director at SLG Treasury.
Large corporates typically avoid outsourcing core treasury functions, which are considered critical and usually well-structured, Tüttö noted. Insurance companies, banks and public sector institutions are also being targeted, alongside mid-market firms with legacy pension schemes.
De-risking momentum
German companies are increasingly seeking to reduce financial risk and remove pension obligations from their balance sheets through contractual trust arrangements (CTAs), Pensionsfonds, pension buyouts, or by outsourcing scheme administration.
Buyout firm Deutsche Betriebsrenten Holding (DBR) recently completed a transaction with a German family-owned holding company, with assets held in an Allianz CTA, and pension administration outsourced to consultancy Hamburger Pensionsverwaltung.
Separately, Deutsche Telekom extended its contract with WTW for the administration of its company pension scheme, covering 135,000 current and former employees.
Discussion is gaining momentum in the German market, and we expect it to continue. Companies want to get rid of the risks associated with their pension schemes, leverage efficiencies and strengthen the governance by outsourcing pension and asset management,” Mercer’s Sauler said.
In Austria, corporates have already outsourced pension asset management to multi-employer pension funds (Pensionkassen).
“Those are partners we work with, and help them overcome their challenges,” Sauler added.
According to Sauler, consolidation is also reshaping pension markets in Switzerland and Germany, triggering fresh debate on outsourcing.
Sourced from IPE.com