GERMANY - Providers of German institutional funds, or Spezialfonds, are increasingly outsourcing the management of their assets, according to new statistics from the BVI, Germany’s fund industry association.
According to the BVI, 35% of the €543.2bn in Spezialfonds volume at the end of 2004 was managed not by the provider itself but by other asset managers. This compares with 25% at the end of 2003.
One reason for the outsourcing trend is the huge popularity of so-called “master funds” among German institutional clients. In a master fund, back office administration of all the clients’ Spezialfonds is centralised within one provider.
That provider, in turn, outsources portfolio management of the funds to other asset managers, a process which usually involves an investment consultant.
In terms of net inflows to Spezialfonds in 2004, BVI said they totalled €17.6bn – more or less inline with net inflows for the past few years. A €5.1bn appreciation in the funds’ assets during 2004 brought total volume to €543.2bn.
BVI added that during 2004, another €98.2bn in assets from German institutional clients was managed outside Spezialfonds vehicles.
Owing in part to lacklustre equity markets, BVI also said Spezialfonds investing in real estate were very much in demand in 2004. These funds recorded €1.1bn in net inflows, bringing their total volume to €13.9bn.
According to the BVI’s new breakdown of the statistics, Allianz Dresdner’s dbi was the market leader in Spezialfonds’ management with an 18.1% share. It was followed by Deka (12.1%), Deutsche Asset Management (8.2%) and Union Investment (7.9%).
Regarding pure administration of Spezialfonds, BVI’s breakdown put dbi as the leader again with a 14.1% share. It was followed by Universal Investment (8.8%), Deka (8.3%) and DeAM (7.6%).