Nordrheinische Ärzteversorgung (NAEV), the German pension fund for doctors in the state of North Rhine-Westphalia, with €16.3bn of total assets, expects a further increase in the net asset value (NAV) of its private markets investments, in percentage and absolute terms, chief executive officer Bernd Franken told IPE.

The scheme has yet to reach its 2025 allocation targets in private equity, private debt and infrastructure, Franken added. The target allocation for private equity investment is set for 12%, private debt for 9%, and infrastructure for 10.5% of total assets, the CIO said.

“Our [investment] strategy has not yet been changed. Our current three-year plan runs until 2025, and will continue to be implemented gradually. We then evaluate the results of the new ALM [asset-liability management] study, and adjust the strategy where necessary,” he added.

The pension fund invests €10.7% of total assets in private debt, 7.8% in infrastructure, and 8.8% in private debt, as of the end of 2023, according the latest financial statement.

NAEV’s asset allocation slightly changed last year, compared with 2022, with an allocation to the three asset classes increasing by a total of 3.4 percentage points, the statement disclosed.

Real estate continues to make up for the largest allocation standing at 22.7% of total assets, although below the 23.4% reached in 2022, it added.

The scheme also allocates 9.6% to equities, 2.3% to absolute return/hedge funds strategies, 12% to mortgage loans, 4.5% to fund-based interest-bearing investments, and 21.1% to fixed income.

“Fixed income was and remains the secure, income-generating foundation of our investment [strategy]. Listed equity markets have seen historic highs and [investors] are speculating that interest rates will fall soon and more,” the CIO said.

NAEV will keep fixed income allocations at a stable level, cutting down on listed equites in favour of private equity.

“We, like many others, believe in higher-for-longer [interest rates] due to structurally higher inflation, and this will lead to higher volatility in stock markets.” the CIO said.

The latest digital edition of IPE’s magazine is now available

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

More from Luigi Serenelli

Topics