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'WILD WEST' MARKETPLACE
MOSCOW - Concerns over low fee levels, high costs and government corruption are deterring foreign money managers from opening Russian offices, despite recent reforms paving the way for a privately funded retirement system.
And, at least one with an existing operation, Franklin Templeton Trust Co., Fort Lauderdale, Fla., has pulled out. Mark Mobius, the firm's head of emerging market operations, would only say: "We just realized that we'd have to invest far more resources and money into the business to make it worthwhile, and after consideration, we decided not to continue."
Elizabeth Hebert, chief executive officer of Pallada Asset Management, Moscow, a subsidiary of State Street Global Advisors, Boston, said a substantial number of primarily U.S. money managers that researched the Russian market after the new pension law was passed in July decided against opening offices.
"There were a number of different issues, some to do with fee structures and costs, and concerns about corruption and the level playing field," she said.
Executives at Genesis Investment Management Ltd., London, were attracted...