German Spezialfonds have been immune to the consequences of the COVID-19 pandemic in terms of “fresh money” collected in the third quarter, according to analysis conducted by Kommalpha.
Net inflows in Spezialfonds totalled €18.9bn, with inflows standing at €80.5bn.
The inflow of fresh money in Spezialfonds totalled €213bn at the end of September, significantly higher than in the same period the prior year, which was €150bn, but institutional investors reclaimed liquidity by returning shares to Spezialfonds, bringing the amount of net inflows at just €53bn.
In particular, net inflows of €6bn for insurance companies in special funds show an extremely high dynamic with a large number of Spezialfonds that rotated in ownership and little net fresh inflows deployed in the vehicles.
This means that liquidity requirements for insurance companies were “very high”, Kommalpha said.
In September pension schemes withdrew €239m from Spezialfonds, while social security, public and church pension institutions pulled out €121m net.
Insurance companies have been the largest contributors in Spezialfonds during Q3, with a peak of over €20bn in July, followed by pension funds with a peak of over €5bn in September and non-profit private organizations.
A total of €43.1bn, almost half of the total inflows sum, was paid into Spezialfonds in July alone, according to Kommalpha. Pension funds injected a total of €13.4bn in fresh liquidity in special funds during the third quarter.
Insurance companies’ net cash flows in Spezialfonds were very volatile in Q3, with the highest value on record of €5.4bn in net inflows in September. In total, insurance companies allocated around €6bn to special funds duting that period.
Net cash flows of non-profit private organizations, mainly foundations, and non-financial corporations stood at €3.7bn. Kommalpha noted that, based on funds’ categories, special pension funds overall collected €13.3bn net in Q3 and mixed securities special funds only €1bn.
The sale of stakes in mixed securities’ special funds for €33.4bn reduced the amount of net inflows in the vehicles, the consultancy said. Equities’ special funds saw €1.2bn net cash outflows.
Real estate special funds received net funds totalling €2.8bn in the third quarter of this year.
Inflows, or fresh money, in mixed securities’ special funds reached €17bn in September, while the highest value for special pension funds was recorded in July with €18.1bn.