GERMANY - Despite lacklustre financial markets, the volume of German institutional funds, or Spezialfonds, saw an increase of 3.6% in the first nine months of this year, statistics from German fund industry association BVI show.

According to BVI, the Spezialfonds volume at the end of September 2004 totalled 532 billion euros, up 18.7 billion euros from last year’s total. Of the increase, 13.3 billion euros were new inflows to the funds, while the remaining 5.4 billion was linked to the appreciation of Spezialfonds assets.

BVI spokesman Frank Bock said that while the increase in Spezialfonds volume was encouraging amid stagnant markets, it was within the range for previous years. In the same nine-month period for 2003 and 2002, Spezialfonds took in 17.5 billion euros and 21.9 billion euros in assets, respectively.

Including segregated funds worth 92.6 billion euros, BVI’s asset management members had 624.6 billion euros in institutional assets under management as of 30 September 2004.

The BVI also said the number of Spezialfonds mandates declined to 4972 during the first nine months of 2004, as institutional investors continued to demand “master fund”-type solutions for their portfolios.

In a master fund, back-office administration of all sub-funds are centralised within one provider. Indeed, the increasing popularity of master funds was reflected in another statistic supplied by BVI.

The association said that of the Spezialfonds volume for 30 September 2004, its members outsourced 34% of the volume, partly to create master funds. This compares with 25% at the end of December 2003.

Regarding market share for Spezialfonds, BVI said that as of 30 September 2004 Allianz Global Investors remained ahead of the pack with an 11.6% share. It was followed by AMB Generali (8.8%), Deka (7.3%) and Universal Investment (7.1%), which ejected Deutsche Asset Management (6.6%) from the fourth place spot.

In the category of real estate funds for institutional investors, Oppenheim Immobilien-Kapitalanlagegesellschaft (OIK) continued to dominate the 13 billion euro-market with a 40.7% share.