G ROUP MANAGEMENT REPORT Asset Management 81 Investments Group investment structure In addition, we held  investments with a current value of 298.4 billion euros. Of these, 4.7 billion euros were in  securities held- to-maturity and 277.9 billion euros in  securities available-for- sale . The latter included 17 (18) percent stocks and 83 (82) per- cent fixed-income securities. The difference with respect to the previous year can be explained first and foremost by our deci- sion to lower the equity allocation in our portfolios. Unrealized gains and losses from dividend-bearing equities increased to 5.3 The current value of  investments in affiliated enterprises, joint ventures and associated enterprises decreased by 7.9 billion eu- ros to 7.1 billion euros. Most of these investments were in asso- ciated enterprises (i. e. companies in which we hold a share of between 20 and 50 percent) which are valued by the equity method. The decline on the prior-year period is essentially due to the de-consolidation of Münchener Rück AG and Beiersdorf AG. Our holding in Münchener Rück AG was reduced from 22.4 percent at year-end 2002 to 12.4 percent, and in Beiers- dorf AG from 43.6 to 16.6 percent. Both participations will be further reduced in 2004. Our business model is based on spreading income and risks, both in respect of the different asset classes as well as the regio- nal structure of our business. Nonetheless, business  this fiscal year will depend to a great extent on the way in which capital and currency markets develop. We expect inflows in the fixed- income business to continue at a satisfactory level and demand in the equity business to pick up further. The radical cost cutting measures taken in the year under review should also produce results in 2004 and we therefore expect the operating result to improve once again. However, due to high acquisition-related expenses, our after-tax result will again be negative. For the most part, though, these expenses will phase out in 2004. After a tax income in the amount of 16 million euros, the seg- ment reported a  loss of 270 million euros; a year earlier, the loss had still been 467 million euros.  Minority interests in earnings amounted to 183 million euros. PacLife – which still holds a 15 percent interest in PIMCO –  accounts for 66 million euros of this amount. Acquisition-related expenses totaled 836 million euros. In agree- ment with KPMG, the accounting procedure has been adjusted here with effect from September 30, 2003. It concerns the agreement to acquire the PIMCO management’s shares in the company over a period of time (also see note 5 “Intangible as- sets” on page 129 of the Notes to the Consolidated Financial Statements). The acquisition-related expenses include amorti- zation of goodwill of 369 million euros as well as 137 million euros for the amortization of loyalty bonuses for the PIMCO management. These bonuses were agreed upon in 2000 as a component of the purchase price and are amortized over five years. A further 330 million euros are primarily “retention pay- ments” for the management and employees of PIMCO and Nicholas Applegate; these, too, were agreed upon at the time of purchase of the fund companies. The  operating result amounted to 733 million euros, an increase on the previous year of 238 million euros or 48 percent. Ad- justed for exchange rate effects, the result would have been 122 million euros higher. Thanks to an improved cost structure on the back of high net inflows and benign market conditions, the cost-income ratio improved from 78.5 to 67.2 percent. In 2004, we aim to complete the current restructuring program at our DRCM unit which mainly manages our equity portfolios. The current value of  Group investments was 398.8 billion eu- ros at December 31, 2003. This amount also comprises the in- vestments from the banking business, including Dresdner Bank, which amounted to 86.4 billion euros. Total Group investments decreased on the previous year (403.0 billion euros) by 1.1 per- cent. 12/31/2003 12/31/2002 Current Weighting Weighting values in  ¤ bn in % in % Interests in affiliated enterprises,  joint ventures and associated  enterprises 7.1 1.8 3.7 Investments 298.4 74.8 71.8 Securities held-to-maturity 4.7 1.2 1.6 Securities available-for-sale 277.9 69.6 66.0 Real estate used by third parties 13.8 3.5 3.7 Funds held by others under  reinsurance contracts assumed 2.0 0.5 0.5 Trading portfolio 61.3 15.4 17.7 Trading assets 146.1 36.7 31.0 Trading liabilities – 84.8 – 21.3 – 13.3 Other investments 32.0 8.0 6.8 Total investments 398.8 100.0 100.0