Ärzteversorgung Westfalen-Lippe (ÄVWL), the pension fund for doctors in Germany’s Westphalia-Lippe region, recorded a 18.1% return last year with its alternative Spezialfonds Lux FIS I, the best result since the launch of the fund in 2006, according to the fund’s financial statement for 2021.
The Spezialfonds’ sub-strategies for private equity, direct landing, infrastructure, distressed debt contributed to the positive result, it added.
Alternative Spezialfonds represent assets worth €2.86bn in the scheme’s portfolio and generated a net return on investment of 4.6% last year.
Allocations in Spezialfonds amounted to around 68.8% of the scheme’s total assets last year, distributed across securities, alternative Spezialfonds and real estate, and returned 4% net last year.
In addition to investing in a retail fund, which accounts for 2.6% of total investments, ÄVWL invests in 15 real estate Spezialfonds with a total book value of € 2.28bn, that returned 5.1% net last year.
The Lux FIS II fund invests in real estate in the US, Europe and Asia and the Pacific region, in office, residential and logistics segments.
For complex infrastructure investments, the pension fund has opted for a closed-end infrastructure debt fund, which has received financing for real estate and infrastructure investments of €270m in 2021.
Additionally, an infrastructure equity fund launched in the fourth quarter of 2020 has invested in the transport and hydropower segments.
Investments in infrastructure totaled €254m in 2021, returning 0.4% net.
The Spezialfonds investing in securities, with assets worth €4.32bn, achieved a net return on investments of 3.2% in 2021.
The mixed Spezialfonds, predominantly investing in liquid asset classes and are worth €3.3bn in assets, recorded a 8.1% performance, according to the statement.
Assets under management increased year-on-year by 4% in 2021 to €13.89bn, with returns on investments of €540m, up 7.5% compared with 2020, according to the document.
The number of members grew by 2%, from 45,256 in 2020 to 46,181 in 2021. Contributions to the pension fund rose by 4.2% year-on-year in 2021 to €636m, from €611m in 2020, due to the low-interest-rate environment and the consequent increasing interest of members in pension products offered by ÄVWL.
Infrastructure investments
The pension fund decided in March last year to apply before the ministry of the state of North Rhine-Westphalia (NRW) to up its investments in infrastructure in light of low interest rates, the statement disclosed.
The finance ministry of the state of North Rhine-Westphalia – the supervisory authority on the matter – had opened up the possibility for pension schemes pursuing a sustainability strategy to build up the allocation to infrastructure investments up to 5%.
ÄVWL invests in sustainable infrastructure to generate cash flow, with its strategy focusing mostly in allocating capital within Europe, it said.
It has financed the construction and operation of the Lappfjärd wind park in Finland, and it has refinanced photovoltaic park Talasol in Spain to generate energy from renewable sources, among other ESG investments, ÄVWL added.
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