GERMANY – German institutional investors have shifted towards more actively managed Spezialfonds and increased their use of external experts in the face of ongoing market volatility, according to ratings agency Telos’s latest Spezialfonds study.
The agency noted a “clear trend” in institutional investors recruiting external help for decisions on asset management and the administration of Master KAGs.
“For the first time in years,” Telos said, “a clear trend towards a hike in the use of consultants can be noted in the field of asset management.”
In the 2013 survey, the share of investors using a consultant almost doubled from 25% in previous years to 47%.
For the selection and design of Master KAG and custodian structures, 37% of investors used a consultant – something that only one in 10 respondents did in 2012.
However, of the 76 institutional investors surveyed, not one said it was planning to increase its use of consultants for asset management decisions in future.
Telos said it saw more business potential for tendering platforms, which 32% of investors are using.
Another 10% said they actively wanted to start using these tools in future for manager selection.
Telos said this might also be linked to a trend towards more actively managed mandates identified in its survey.
The share of investors using active mandates in their equity portfolios grew from 60% to almost 77% over the last year.
The actively managed equity mandates “clearly dominated” among Pensionskassen, Versorgungswerke and Versicherungen in particular, Telos said.
However, the ratings agency also noted that the average equity quota among insurers was still only around 3-4%. For most Pensionskassen and Versorgungswerke, it was generally higher, it said.
Telos also found an increase in equity investments among all institutional investors “for the first time in a long period”.
It said it was convinced this reflected a trend towards more investments in real assets.
For government bonds, 60% of all respondents are employing an active approach, compared with 51% the year previous.
Further, more investors are tendering mixed mandates to increase flexibility due to challenging market conditions, Telos said.
This is a reversal of the trend identified in 2012 towards more specialised mandates.
The survey’s respondents comprised Pensionskassen, Versorgungswerke, insurers, corporates and banks.
The 76 investors have combined assets under management of around €480bn, of which €160bn is invested in Spezialfonds.