Third in a four-part series on European InvestmentIssues.

How are German investment managers rallying in the wake of theopen-end fund freeze of last year? Very well, thank you, althoughreports that the freeze would have no impact on the frothyinvestment market must be taken with a grain of salt. Dr.Karl-Joseph Hermanns-Engel, managing director of AXA InvestmentManagers in Cologne, Germany, sees trouble ahead in the perceptionsof the market if not in the actual stability of the vehiclesthemselves. The crisis represented a general market loss ofsomething on the order of 8 billion euros, reports Hermanns-Engel,and a loss for AXA of 300 million euros of its total 1.5 billion inretail funds. The result was a clear crisis of faith in the market,one which still lingers, as well as stepped-up debates over thenature of transparency and standardization. Nevertheless, AXA,which boasts a pan-European investment portfolio of 29 billioneuros for global clients, is barreling ahead, as Hermanns-Engeltold GlobeSt.com during Mipim in Cannes. The firm is planningrollouts of a varietyof funds slated through the end of the year, and perceptionswill simply have to catch up with reality, even as that realitychanges.

GlobeSt.com: What's the back-story on thecrisis?