CIG Pannónia life insurance and the electricity industry companies’ pension fund VIT signed a declaration of intent on a long-term strategic cooperation, the parties announced.
The pension fund will continue to remain in members' ownership, but two companies will be established to handle asset management and fund services, respectively, and CIG will buy stakes in these companies, said the fund's CEO Csaba Gaál.
The pension fund will take the name Pannonia Pension Fund, said fund chairman János Vokony.
CIG will initially buy a 20% stake in the asset management company, with an option for a further 70%, depending on the growth of its assets. In the pension services company, CIG's initial share will be 10%, with an option for a further 39%, depending on the growth in the number of pension fund members.
VIT currently manages assets worth HUF 60 billion as well as providing the fund services. CIG employs an external asset manager.
Béla Horváth, chairman of CIG's board of directors, said VIT achieved a 10.8% yield last year, while operating costs came to just 3% of assets.
Chairman of CIG Pannónia's supervisory board Zsigmond Járai said the insurance company plans to form similar partnerships with other pension funds.