The volume of assets in the hands of Germany-based portfolio managers has declined over the course of the last 10 years, according to research by fund industry association BVI.
Germany “imports” portfolio management services stood at €59bn on a net basis today, while 10 years ago German portfolio managers were net exporters of services amounting to €71bn, BVI stated.
Furthermore, BVI found that the volume of assets managed abroad has grown by 8.2% per year. Now the capital of domestic investors is managed by portfolio managers abroad, especially in London and in the US, it added.
German providers have outsourced the management of €1.2trn in funds and mandates to other companies, taking over investment decisions for almost €1trn in third-party portfolios.
Asset managers in Germany take investment decisions for assets amounting to €2.8trn, with two thirds of portfolio management services conducted on behalf of insurance companies, pension funds, trusts and other institutions.
Swiss scheme plans further investments in bonds
Swiss CPV/CAP Pensionskasse Coop, with around CHF11.27bn in assets under management, plans to increase its allocation to fixed income.
Rising interest rates open the door for CPV/CAP to reconsider investing again in Swiss nominal investments, including bonds, achieving a positive return. Negative interest rates in Switzerland are over for now, meaning the fund can hold liquidity without costs due to negative interest, the scheme said in its 2022 financial statement.
The pension fund invests in bonds through a core-satellite strategy. It Invests in bonds that meet the credit quality of its strategic bond benchmark. Investments in the lowest credit quality range according to the benchmark are limited to a maximum of 10%, and require the approval of the investment committee, it added.
CPV/CAP has also allocated assets to an infrastructure fund investing in Europe, focusing on the energy transition, communication, transport and social infrastructure sectors.
The fund has carried out two investments so far, one in fibre network in Austria and the other in the construction of a new sewer beneath the Thames in London.
Private equity investments have been held in a limited partnership for collective capital investments (KmGK) approved by the Swiss Financial Market Supervisory Authority (FINMA), in which the CPV/CAP is the only investor.
The scheme invests 16.2% of its total assets in Swiss bonds, 9.9% in bonds denominated in foreign currency, 7% in Swiss equities, 18.3% in foreign equities, 2.4% in infrastructure, 11.3% in alternatives, 26% in Swiss real estate, 5.6% in real estate abroad, and 3.2% on cash, according to the statement.
Last year the pension fund returned -5.78%, against a 6.85% benchmark.
BaFin strips Adrealis of asset management licence
The German financial supervisory authority BaFin has stripped Adrealis of its asset management license, which allowed the exclusive management of the firm’s closed-end investment funds.
Adrealis, part of the Xolaris group, is an asset management company specialising in alternative investments in private equity, real estate, renewable energies and ships.
The regulator took the decision to take away the firm’s licence based on the German Investment Code (Kapitalanlagegesetzbuch – KAGB).
BaFin can revoke a license if an asset management company does not employ at least two portfolio managers, like in the case of Adrealis.
BaFin will take measures to ensure that the investment funds managed by the firm are transferred to the custodians that will continue to manage them in the interests of the investors, it said.
Three further institutions join German dashboard
Three insurance companies have joined the German pension dashboard – Digital Rentenübersicht — bringing the total number of institutions on the online platform to nine.
The latest to join are Öffentliche Lebensversicherungsanstalt Oldenburg, Öffentliche Lebensversicherung Sachsen-Anhalt, and Provinzial Lebensversicherung Hannover.
The dashboard went live on 30 June with the Versorgungsanstalt des Bundes und der Länder (VBL), the supplementary pension provider for public sector employees, Union Investment Privatfonds and the manager of first pillar pensions Deutsche Rentenversicherung being the first to connect to the platform.
Members can access the online platform to have an overview of their personal pension entitlements from statutory, company and private pension schemes.
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