German Spezialfonds have proven to be a refuge for institutional investors in times of rising geopolitical tensions that have lead to Russia invading Ukraine on 24 February.
While equity markets plummeted in mid-February and early March, hitting the new fund business, Spezialfonds generated “almost exclusively” €13bn net inflows, according to the latest figures published by the German fund association BVI.
In March Spezialfonds – which are limited exclusively to institutional investors – generated €6.4bn, while retail funds recorded outflows for €2.7bn.
Overall funds in Germany recorded net new business of €45.1bn in the first quarter of this year with record inflow in January of €30.3bn. Net sales in open-ended Spezialfonds remained stable year-on-year in Q1 2022 at €31.2bn, but down from €52.47bn in Q4 last year and below the €32.5bn in net sales recorded in the first quarter of 2020.
Net sales of securities and private equity funds in open-ended Spezialfonds stood at €27.74bn in the first quarter of this year and net sales for real assets funds totalled €3.49bn during the same period.
Net assets in open-ended Spezialfonds came to €2.10trn in the first quarter of the year, out of total assets in German funds of €4.15trn, a 4% reduction recorded by the fund industry compared with €4.31trn recorded at the beginning of the year.
The €2.10trn in assets managed by Spezialfonds include €1.95trn in securities and private equity funds and €144.05bn in real assets funds, according to BVI. Net assets in open-ended Spezialfonds fell from €2.18trn at the end of December last year but above the €2.01trn recorded at the end of March last year.
Net assets in property funds managed by fund companies grew by 13% year-on-year from €255bn to €288bn in Q1, with open-ended Spezialfonds accounting for €144bn of the assets, according to BVI.
According to Kommalpha, pension schemes have invested the highest amount in the form of net inflows in Spezialfonds in 2021, €38.8bn, up from €10.4bn in 2020.