Pension assets managed by German funds grow to €1.78trn

The share of pension assets managed by German investment funds has increased to 44% in the middle of this year, from 40% in 2017, reaching a total of €1.78trn, according to figures published this week by the investment funds association BVI.

This means that assets for old-age provisions grew by more than €600bn over the years, it said.

German funds manage assets primarily on behalf of life insurance companeis and occupational pension schemes, each amounting to €540bn, according to BVI.

Occupational pension schemes include direct commitments (€250bn) and Pensionskassen (€170bn) – two ways to provide occupational pensions in Germany.

Fund companies manage €390bn on behalf of pension schemes for professionals, for example doctors, pharmacists, and lawyers. Supplementary pension schemes for federal, state, and municipal employees, as well as for churches, account for €160bn of managed assets, BVI data showed.

For conventional and state-subsidised savings plans, for example Riester-Rente plans, investment fund companies manage €140bn, it added.

The fund industry is therefore the largest manager of capital for old-age provision in Germany, it added. German funds manage a total of €4trn in assets.

“Although citizens so far often provide for their pensions through life insurers or occupational pensions, a large part of this capital is eventually managed in funds,” said Thomas Richter, BVI’s chief executive officer.

Pension investors have allocated €1.25trn of assets to open-ended Spezialfonds this year, up from €810bn in 2017, €330bn in open-ended retail funds, up from €180bn in 2017. They also now invest €160bn in discretionary mandates, down from €170bn in 2017, and €40bn in closed-ended funds, BVI said.

Open-ended Spezialfonds have recorded significantly lower inflows at the end of the third quarter of this year compared with the same period last year, according to BVI’s figures published last month.

Net inflows of open-ended Spezialfonds totalled €27.4bn at the end of Q3 2023, down from €51.71bn recorded in the same period last year, the figures showed.

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