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German pension schemes invest in funds offering student loans

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GERMANY - The pension fund for chartered accountants in the German province of Northrhine-Westphalia (WPV) is considering additional investments in a university student support programme.

Three years ago, the €1.5bn Versorgungswerk made its first investment into the education sector, and the exposure to this kind of alternative asset has since increased to €5m.

Hans-Wilhelm Korfmacher, managing director at WPV, told IPE: "If it fits our overall asset allocation, we will consider increasing our investments into the education sector."

Korfmacher himself is a member of the advisory council of Brain Capital, a specialist in educational funds.

"The most important point is that we can combine an altruistic aim with a good risk/return profile," he said.

According to Marco Vietor, managing director of Brain Capital, the expected return is around 6%, with a very low correlation to other asset classes.

The €3.4m Rheinische Versorgungskasse is also invested in these education funds.

In total, Brain Capital is currently managing seven funds with a total of €25m, from which selected students are being granted loans to pay the tuition fees they must repay once their regular income reaches a certain threshold.

For more information on education funds in Germany, see IPE's November issue.

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