German pension schemes represent the fastest growing group of investors allocating assets in investment funds, according to consultancy Kommalpha.
The share of funds held in portfolios by pension institutions has increased fivefold in the last 18 years, doubling by 34 percentage points, the consultancy said in a report analysing the financial situation of pension schemes and insurers between 2005-2023.
The share of fund investments in pension institutions’ portfolios stood at 69%, by far the highest among investors, followed by life insurers with a share of 49%, and non-life insurers at 33%.
Allocations to funds reached €1.28trn and are “clearly the dominant form of investments” for pension funds and insurance companies, Kommalpha said in the study. They rose by €933bn since the end of 2005, it added.
Life insurers are the largest investor group in funds with €573.5bn invested, followed by pension institutions with €467.5bn, the study revealed.
Fund investments account for €510bn, or 17% of total assets, of pension funds and insurance companies, followed by allocation to bonds with €473bn, and loans with €334bn, it added. Cash and deposits make up just under 9% of the total share of assets invested by pension schemes and insurance companies.
Pension institutions and insurers’ assets amounted to €3.04trn at the end of 2023, and have almost doubled by around €1.46trn over the last 18 years.
Pension schemes have recorded the highest relative growth rates in terms of assets, with investments almost tripling during the period under review, according to Kommalpha.
Pension funds remain the largest group of investors in Spezialfonds with €562bn, and a market share of 27.6%, followed by insurance companies with €549bn, and a market share of 27%, according to the report.
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