PwC Bamosz 2003

Implications of the EU Accession on the
Investment Management Industry in Hungary

July 2003

1

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

2

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


3

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.

Growth Rate of AUM

50.00% The compound annual
growth rate (CAGR)
Hungary
40.00% of Hungarian mutual
EU funds AUM between
30.00% 31 December 1997 and
31 December 2002 was
20.00% 23.4%

10.00%

0.00%

-10.00%

-20.00%
1998 1999 2000 2001 2002 Source: Bamosz, FEFSI

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).


7

Investment Fund AUM and GDP Per Capita

Investment Fund AUM per Capita in EURO GDP per Capita in EURO

9,000 25,000 24,000
8,513
8,000
19,420
7,000 20,000

6,000
15,000
5,000 4,716
EURO

EURO
4,000
10,000
3,000 6,453
2,000 5,000 3,970

1,000
349
64
0 0
1997 2002 1997 2002
Hungary
Source: FEFSI, Eurostat EU15

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.


8

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


9

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).

Investment Fund Market Structure Split by Asset Class

Hungarian AUM by Asset Class as at European AUM by Asset Class as at
31 December 2002 31 December 2002

0.5 2.2
8.6 8.7
19.1 Balanced Balanced
23.6
Bond
Bond

3.5 Equity
Equity 28.3
Fund of
Money Funds
3.5
Market Money
Market
Other
Other

68.4 30.9
Source: Lipper

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).


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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.

Hungarian Mutual Fund Market. Market Concentration – Top 5 Players

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

13.2%
OTP
2.8%
Budapest (GE)
51.0%
5.5%
K&H Általános /
ABN AMRO
CA IB
8.7%
CIB (Intesa-BCI)

Others

18.9%

Source: PwC

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).

Hungarian Mutual Fund Market. Asset Composition of Top 5 Players

Asset Composition of Top Hungarian Players

100% 5.4% 6.3% 7.3%
0.6% 0.3% 13.4%
90%
0.8%
80% Equity
31.7%
70% 29.6%
Balanced
60% 67.0%
50%
94.0% Bond
40%
30% 61.1% Money
56.2%
Market
20%
26.4%
10%

0%
OTP Budapest IM ABN CA IB Securities
AMRO/K&H IFM
Source: Bamosz 31/12/2002


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2.4 Asset management value chain

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

Asset Management Value Chain in Hungary

Custody Customers’ account
Manufacturing Distribution
administration
Product administration

Activities • Product • Safe keeping of assets • Customers’ account • Sales
development • Clearing and settlement maintenance • Marketing
• Research • Portfolio maintenance • Customers’ trade • Customer relationship
• Asset allocation • Valuation of product processing management
• Portfolio • Legal administration of • Customer reporting
construction product
• Trading

• Investment • Custodian • Distribution • Distribution
IM owned by agent agent
manager
a bank

IM not • Investment • Custodian • Distribution • Distribution
owned by a manager agent agent
bank

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

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


12

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).

Typical Income Patterns of the Asset Management Value Chain in Hungary

3) Custody Fee Custodian
& Transaction
Fee
Investment amount
Redemption proceeds Distribution
Fund Agent
8) Retrocession of Management Fee

4) Management 5) Performance 6) Account
Fee net of Fee Investment amount + Maintenance
retrocession (incl.
1) Front-end Load Fee
Administration
Fee)
Investment
Manager cum 7) Redemption proceeds minus Back-end Load (2)
Administrator

Investor


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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.

Average Fee Levels Per Asset Class of Hungary Funds

Average Fee Level per Fund Category

Fee Money Market Balanced Equity
Bond Funds
Funds 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)

2.5.2 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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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.


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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.

GDP Growth Rates

6
Euro area
5
Hungary
GDP growth rate

4

3

2

1

0
1998 1999 2000 2001 2002 2003 2004

Source: OECD, 2003 and 2004 forecasted

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.


17

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.

Growth Rate of Financial Wealth

25.0%

20.0% Hungary

15.0%
EU12
EURO

10.0%

5.0%

0.0%

-5.0%

-10.0%
1998 1999 2000 2001 2002

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)

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.


18

Financial Wealth Per Capita

70,000 64,014
60,000
48,723
50,000

40,000 Hungary
EURO

30,000 EU12

20,000

10,000 4,331
1,766
0
1997 2002
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)

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.


19

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.

Growth and Stability Pact Criteria and Situation in 2001

Inflation Interest Forex Rate Deficit Debt 2001
Criterion
2001 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

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.


20

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).


21

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.


22

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.


23

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.


24

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.

Asset Management Value Chain in 5 to 10 Years

Custody Customers’ account
Manufacturing Distribution
administration
Product administration

Activities • Product • Safe keeping of assets • Customers’ account • Sales
development • Clearing and settlement maintenance • Marketing
• Research • Portfolio maintenance • Customers’ trade • Customer relationship
• Asset allocation • Valuation of product processing management
• Portfolio • Legal administration of • Customer reporting
construction product
• Trading

Investment Custodians’ Distribution agent Distribution agent
managers‘ activities limited to – opening platform – opening platform
activities limited to custodian for for off-shore funds for off- shore funds
HUF fixed income domestic products and third party and third party
and domestic and subcustodian products products
equity for off- shore funds

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

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.


25

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


26

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


27

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.


28

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


For further information, please contact:

PricewaterhouseCoopers BAMOSZ

Dariusz Nowak Gyula Fatér
Partner President
PricewaterhouseCoopers, Zagreb Phone: (36-1) 450-7262
Phone: (385) 1632-8840 E-mail: fatergy@bbrt.hu
E-mail: dariusz.nowak@hr.pwc.com
Péter Holtzer
Árpád Balázs Member of the Board
Senior Manager Phone: (36-1) 486-6519
PricewaterhouseCoopers, Budapest E-mail: holtzer@otpalap.hu
Phone: (36-1) 461-9163
E-mail: arpad.balazs@hu.pwc.com

Markus Schwamborn
Senior Advisor
PricewaterhouseCoopers, Luxembourg
Phone: (352) 4948-48-2142
E-mail: markus.schwamborn@lu.pwc.com

PwC Bamosz 2003

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