The Pensionskasse der Mitarbeiter der HoechstGruppe, the Frankfurt-based German multi-employer occupational pensions provider, is focusing on new direct investments primarily in bonds with good credit ratings this year, it said in its 2023 financial statement.
The pension scheme has, instead, paused new investments in real estate, investment funds and alternative asset classes.
Hoechst-Group Pensionskasse expects real estate valuations to fall in 2024, which could impact dividends from indirect real estate investments, it said, adding that it invested more heavily in high-quality registered bonds (Namensschuldverschreibungen) in 2022 and 2023, as interest rates were rising.
Investments in registered bonds increased from €1.05bn in 2022 to €1.21bn in 2023, according to the statement.
Investments in “classic” bonds, such as German Pfandbriefe or registered public sector bonds, banks and companies with strong credit ratings, became more attractive with coupons ranging between 3.5% and 4.7%, it said.
The pensions provider said that infrastructure remains an asset class “that is increasingly attracting public interest, with regulators and legislators acting to facilitate investments in view of public budget’s austerity in Germany”.
The pension fund’s assets increased by a total of €226.2m, or 7.7% year-on-year, to €3.17bn in 2023, compared with a 12.5% increase in the prior year, according to the statement.
It invests €308.5m in real estate, €1.28bn in equities and investment funds, €119.2m in mortgages, €1.34bn in registered bonds and promissory notes, and €114.5m in deposits at credit institutions, figures in the statement show.
Income from contributions increased in 2023 to a total of €173.3m, compared with €168.4m in 2022, exceeding expectations, it said.
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