The Russian fund management market is to undergo radical consolidation with many firms going bust or being bought up by the market leaders, ...

The Russian fund management market is to undergo radical consolidation with many firms going bust or being bought up by the market leaders, according to a leading executive. Aren Apikyan, managing director at Alfa Capital management company in Moscow, told Wealth Briefing: "We now have 150 asset management companies in Russia but 90 per cent of the sales are down to six or seven of these. The remainder have 10 per cent of the market but this is going to change with more bankruptcies happening and the rest being bought up by foreign asset managers." Mr Apikyan's comments at a Alfa Capital conference in Moscow last Friday follows the announcement a fortnight ago of a Russian joint venture between Benelux-based Fortis Investment Management and CIT Finance Investment bank in St Petersburg. Mr Apikyan said Citibank had been largely responsible for the recent spurt in the $15 billion Russian mutual fund market through its open architecture platform, which offers clients access to the fund ranges of partnering companies. He said: "Citibank's partnerships with us and other houses represents about 15 per cent of market sales." Alfa manages more than $400 million for corporations, high net worth individuals, fund-of-funds, pension funds and retail investors. Alfa last year prised star portfolio manager Ruslan Buslov from Moscow rivals Pallada Asset Management following the demise of Pallada's alliance with State Street Global Alliance. Private banking services in Russia are currently attracting more money than mutual funds. The total amount of assets under discretionary management in closed private funds, a Russian vehicle similar to a private banking account, totals about $3.5 billion, according to a study by Alfa.