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Impact Investing

IPE special report May 2018


Spezialfonds’ growth slackens in 1999

Despite continued strength in 1999, growth rates for the German Spezialfonds market look set to be down by between one fifth and a quarter on those of the peak year 1998.
Early reflections by Spezialfonds expert Hans Karl Kandlbinder, based on available Bundesbank statistics to October last year, show that whereas in the first 10 months of 1998 more than three quarters of financial flows were into Spezialfonds, the proportion was only 53.2% by October 1999.
In absolute terms this represents e40bn compared to e51bn the previous year. While average monthly inflows represented e5.6bn in 1998, this monthly figure dipped to e4,006m – a drop of 28%.
The strong but weakening Spezialfonds trend is also reflected in the volume of Spezialfonds business as a percentage of the total German investment funds market – 64% in 1998, but 62.5% last year.
Accordingly the year on year volume rise was only 14.8% (e55bn) last year, against a 23% boost (e64.6bn) during the preceding 12 months.
New Spezialfonds issues have also dropped back from around three for every banking day in 1998 to 2.5 per day by last October – still a substantial number though, Kandlbinder points out.
Public funds pushed ahead in all respects compared to the previous year. In terms of development though, primarily real estate-based public funds, but also real estate-based Spezialfonds, are moving positively away from securities-based Spezialfonds.
On the securities-based side, the investment trend, which has steadily doubled since 1996, has continued to progress strongly with two very discernible trends.
In equities, the figure has risen from 25% of the funds volume at the end of 1995 to 41.4% by October 1999 and for foreign securities during the same period the rise has been from 15% of fund volume to 39.7%

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