The investment inflows into Spezialfonds continued at a very high level in 1999, despite being almost 11% less in volume terms than the year before, according to the figures in this year’s Kandlbinder Report, distributed with this issue of IPE (see table).
Of the volumes directed towards Germany’s funds, new money going into Spezialfonds last year, as a proportion of total inflows, amounted to 61.2%, whereas in previous years this has been as high as 79% of the fund industry’s total new money flows.
But the overall growth, even if not at the peak levels of fbefore, was still enormous by any standards, with volume growth in 1999 of 28.4%. The rate of new Spezialfonds being set up slackened appreciably last year, dropping to an average of 2.5 new vehicles rolling off the assembly lines of the KAGs each banking day. The year before it had been three.
One of the clearest trends is the increasing proportion of funds assets in equities, amounting to 38% at the end of last year, another is the greater portion devoted to non-German securities accounting for 43% of portfolios as at the end of 1999. And it looks as if the trends noted above are continuing.
The biggest group of investors in Spezialfonds is institutional investors, particularly insurance companies and pension funds, which account for 52% of investors.
While non-German institutional investors are a declining breed as users of Spezialfonds, the opposite is true regarding those KAGS with non-German parents, which now count for the most numerous group of market group of market participants, accounting for 18 out of the 55 KAGs.
While there has been immense fluctuations in where the money flows within Spezialfonds, the most notable current trends is the flow in favour of insurance companies’ KAGs.