Institutional investors in Germany have withdrawn €15.7bn from mandates in the first half of this year, according to figures published today by the country’s fund industry association BVI.

Investment funds received €28.3bn net in new money in the first half of 2024, according to the figures.

Among institutional investors, pension schemes remain the largest investors in open-ended Spezialfonds, with €753bn, up by 45% from mid-2019, from assets totalling €521bn, primarily the results of high inflows of funds, BVI stated.

Insurers follow in second place with assets totalling €524bn allocated to open-ended Spezialfonds, it added.

Open-ended Spezialfonds saw a total net inflow of assets decreasing to €15.14bn in this year, from €16.87bn last year.

The largest share of assets flowing to open-ended Spezialfonds is invested in real estate funds, with €2.42bn, down from €3.55bn last year, and the remaining €276.7m is allocated to fund of funds (FoFs), up from -€115.3m last year, the figures showed.

Net inflows to closed-ended Spezialfonds went up to €1.45bn so far this year, from €1.22bn last year. Assets held in Spezialfonds, a vehicle opened only to institutional investors in Germany, have decreased over the last five years, hit recently by price losses as a consequence of higher interest, BVI explained.

For regulatory reasons, insurance companies hold a high share of bonds in Spezialfonds, it added.

Clemens Schuerhoff Kommalpha

Clemens Schuerhoff at Kommalpha

Lower net inflows of pension schemes in Spezialfionds are primarily the result of direct investments in bonds becoming more attractive since mid-2022, Kommalpha’s managing director Clemens Schuerhoff told IPE commenting on a “remarkably poor” net inflows of assets of pension funds and insurance companies in Q1.

Assets channelled by non-profit organisations, for example churches, credit institutions, manufacturing and service companies (ex financial services), to Spezialfonds, have instead increased since mid-2019, BVI added.

The German fund industry managed a total €4.31trn on behalf of investors at the end of June this year, up from €4.14trn at the end of 2023. Assets have almost doubled in the last 10 years, increasing by an average of just under 7% per year, and reaching in the first half of this year a record level seen at the end of 2021, according to the association.

The largest share of assets under management amounting to €2.13bn is invested in open-ended Spezialfonds, up from €2.01bn in the same period last year. Closed-ended Spezialfonds held assets amounting to €55.54bn at the end of June this year, including €15.64bn in closed-ended real estate Spezialfonds, up from €48.98bn in the same period last year, according to BVI figures.

Fund companies manage €1.49bn in open-ended retail funds, with €630bn locked in discretionary mandates and €58bn in closed-ended funds.

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