Armenian Central Bank registered C-QUADRAT Ampega Asset Management Armenia LLC and granted it a license of an asset manager. C-QUADRAT Ampega Asset Management Armenia is a joint venture of German Talanx Asset Management and Austrian C-QUADRAT.

74.9% shares of "C-QUADRAT Ampega Asset Management Armenia" is owned by C-QUADRAT Investment.With offices in Vienna, London, Frankfurt and Geneva and sales activities in 17 countries, C-QUADRAT is active throughout Europe.

Mediamax talked to Andreas Wimmer, Member of the Board of C-QUADRAT AG.

- Why did Talanx and C-QUADRAT decided to start working in Armenia and manage the pension savings of the citizens? How long have you been studying the Armenian market?

- Talanx is the largest single-share holder of Frankfurt Stock Exchange listed C-QUADRAT Investment AG. C-QUADRAT was in talks with the Central Bank of Armenia about possible involvement in the management of the mandatory pension fund system for several months.   

C-QUADRAT Ampega Asset Management Armenia aims to offer top-quality asset and fund management services in Armenia. C-QUADRAT Ampega Asset Management Armenia intends to play a leading role in the Armenian financial market, promote the implementation of the Armenian pension reform and support the development of asset management and investment services industry in the country.

C-QUADRAT Ampega Asset Management Armenia is a Joint Venture between C-QUADRAT Investment AG, Vienna/Austria, and Talanx Asset Management GmbH, Cologne/Germany.

We intend to cooperate with various local institutions and financial market participants in Armenia e.g. Central Bank of Armenia, brokerage companies and local banks and others.

- Like any other reform, the pension reform too causes many questions and concerns among Armenian citizens. What arguments can you bring to dispel the existing fears?

- Preconditions for Armenian pension reform were almost the same as everywhere in the world: aging population, rising pressure on state budget, and incapable PAYG system. As we know, the Armenian Government has been developing a pension reform for several years and decided that the PAYG pension system should be replaced by a multi-pillar system.

The 2nd pillar, a completely new part of the pension system, is a mandatory funded pension, which is intended to compensate individuals’ income, based on their contributions at working age with aim to help a person to maintain his or her previous income and life standard after retirement. The funded pension put a person in charge of his or her own future, while the remaining component - the state pension should guarantee the minimum income necessary for subsistence.

- One of the concerns is that the undeveloped stock market in Armenia may become an obstacle for the implementation of a full-fledged pension reform.

- The primary goal of reforming a pension system is a goal of providing sustainable retirement income in a way suitable to the individual country. The secondary goals include among others the goal of developing the financial markets. We plan to promote and support the development of local financial markets, including Armenian capital market, in cooperation with the Government, Central Bank and other relevant institutions.   
 
- Can you tell us where and how you are going to invest the pension savings of Armenian citizens and what your investment strategy will look like? Can we say that the funds will be invested mainly outside Armenia?

- Contributions paid by or on behalf of participants in the mandatory pension scheme will be invested in separate pension funds. Pension Funds are managed by independent professional asset managers with the aim to increase the value of the contributions till the proceeds are paid to the participants to in the form of pension benefits after the participants reach the retirement age.

Participants do have the right to choose their pension fund manager and type of pension fund. Pension funds are not owned by the fund manager but by the entirety of pension scheme participants.

All funds do have guidelines and restrictions for management in order to ensure a stable growth of value. Basically investments of the funds will be made in Armenian and international securities with very high quality. Investments in foreign currency securities should be up to 40%.

The main difference between the three types of pension funds stipulated by the Armenian pension fund legislation is the share of the fund invested in equities, which do have higher growth potential, but also higher risk then securities with a fixed interest rate.