German Spezialfonds have proven to be a refuge for institutional investors in times of rising geopolitical tensions that have lead to Russia invading Ukraine on 24 February.

While equity markets plummeted in mid-February and early March, hitting the new fund business, Spezialfonds generated “almost exclusively” €13bn net inflows, according to the latest figures published by the German fund association BVI.

In March Spezialfonds – which are limited exclusively to institutional investors – generated €6.4bn, while retail funds recorded outflows for €2.7bn.

Overall funds in Germany recorded net new business of €45.1bn in the first quarter of this year with record inflow in January of €30.3bn. Net sales in open-ended Spezialfonds remained stable year-on-year in Q1 2022 at €31.2bn, but down from €52.47bn in Q4 last year and below the €32.5bn in net sales recorded in the first quarter of 2020.

Net sales of securities and private equity funds in open-ended Spezialfonds stood at €27.74bn in the first quarter of this year and net sales for real assets funds totalled €3.49bn during the same period.

Net assets in open-ended Spezialfonds came to €2.10trn in the first quarter of the year, out of total assets in German funds of €4.15trn, a 4% reduction recorded by the fund industry compared with €4.31trn recorded at the beginning of the year.

The €2.10trn in assets managed by Spezialfonds include €1.95trn in securities and private equity funds and €144.05bn in real assets funds, according to BVI. Net assets in open-ended Spezialfonds fell from €2.18trn at the end of December last year but above the €2.01trn recorded at the end of March last year.

Net assets in property funds managed by fund companies grew by 13% year-on-year from €255bn to €288bn in Q1, with open-ended Spezialfonds accounting for €144bn of the assets, according to BVI.

According to Kommalpha, pension schemes have invested the highest amount in the form of net inflows in Spezialfonds in 2021, €38.8bn, up from €10.4bn in 2020.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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