GERMANY - Assets from German pension schemes and insurers account for half of the €699bn in institutional fund (Spezialfonds) volume, according to a study by German asset management association BVI.
Broken down, the study showed assets from pension schemes alone made up 11% of the volume while funds from insurers account for 40%, though much of this share is pensions money as insurers operate many multi-employer schemes and manage third-pillar assets.
Banks make up the next largest largest group of Spezialfonds investors with 22% of assets, followed by foundations and industry associations with 17%.
The remainder is split between ecumenical organisations (5%), social security agencies (2%) and unidentified parties (3%).
Details of the study also revealed 60% of assets were in balanced equity/bond funds, 25% of money is in bond funds and 11% is in equity funds while the remainder is held in open-ended property funds (3%) and cash (1%).
The study added between April 2006 and April 2007, Spezialfonds took in €45bn in new assets, bringing the total volume of assets under managment to €699bn.
That said, Luxembourg has begun an effort this year to lure institutional assets away from its German neighbour. Last February, it launched its own version of the German Spezialfonds which provides considerable investment freedom.
The Luxembourg Spezialfonds also differs from the German vehicle by permitting investment from private clients and not strictly institutions.
The German government has answered the challenge from Luxembourg by recently removing all remaining investment restrictions on Spezialfonds. The vehicles must, however, demonstrate to the regulator BaFin that they have a "balanced mixture of risk".
Separately, German private bank Metzler said its pensions management business took in €200m in new money between January and June 2007. This brings the total volume of pension assets it manages to €1.4bn.
Beyond its own pension assets, Metzler runs those from 200 other German firms which have created corporate schemes known as CTAs and so-called "overtime accounts".
These accounts enable employees to save, on a tax-deferred basis, the monetary equivalent of overtime hours, unused holiday, cash bonuses or part of salary to finance retirement.