ING Investment arm hit by retail outflows
Assets managed by ING Investment Management, the funds arm of the Dutch financial-services group, for outside clients dropped 10% in the fourth quarter of 2008 as retail investors, alarmed at volatile markets, withdrew a net €1.1bn ($1.3bn). However, this was partially offset by a net €600m of new money from institutional investors.
ING Investment Management runs €333bn in total, though €128bn of that is money it manages on behalf of the ING group. Assets under management for external clients stood at €205bn at the end of 2008, it reported today, down 10% from the end the third quarter.
In Europe, it said it had sold a gross €1.3bn of new low-risk products to institutional investors, and put extra effort into client retention.
ING also sold off its domestic French fund range, saying it wants to concentrate on a single retail platform administered in Luxembourg.
In the US, assets fell by €13.6bn to €75bn, mostly thanks to deteriorating markets and asset prices - though it also lost a net €600m in the quarter from client withdrawals. The nationalisation of the Argentine private pension system also lost ING €4.1bn's worth of business.
ING also suffered net outflows of €1.4bn from its investment businesses in Asia in the fourth quarter, though it said the launch of a climate-themed fund in Malaysia had garnered €40m of new business.
ING is also one of the largest real estate fund managers in Europe, with €66.5bn under management. However, that too was 10% less than at September 30, entirely because of the drop in property values and the decline in share prices of listed real estate companies.
The company said that net inflows at its US real estate businesses - Clarion Real Estate Securities, Clarion Partners and Clarion Capital - were offset by net outflows in separate accounts and funds in the UK and Europe.
It also said that about €2.2bn of the debt in its real estate business would mature in 2009, and require refinancing. The availability of debt and the willingness of cash-strapped banks to negotiate over new terms is a key concern at the moment, with many investors leery of managers with too much leverage.
ING Real Estate said the €2.2bn amounts to only about 10% of its total debt burden of €22bn.
--write to mcobley@efinancialnews.com
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