GERMANY - Almost two-thirds of German institutional investors do not plan to renew current Spezialfond mandates in the next year, a survey by German consultancy Kommalpha has found.
Polling investors with a combined €340bn in assets under management, the consultancy also noted waning interest from institutional investors in multi-asset mandates, with 34% employing such mandates, a 12 percentage point drop over last year.
The consultancy said the current market was too volatile for many investors, referencing recent political unrest in north African states, as well as the Japanese earthquake as reasons for the unwillingness to commit to further mandates.
Looking specifically at German Pensionskassen and Versorgungswerke, it noted that only 20% were prepared to commit new funding to Spezialfonds in 2011.
However, despite the reduction, multi-asset mandates remained the most popular option when investing in Spezialfonds, with bond and equity mandates a distant second and third at 25% and 21% of total assets, respectively.
Real estate proved as popular as alternatives, while hedge funds and private equity investments combined accounted for the remaining 12% of all assets.
In its report, Kommalpha said 2009's higher exposure to multi-asset mandates was a symptom of uncertainty triggered by the financial crisis, with investors hoping to gain returns through diversification.
It added: "Only 13% of investors were still exposed to one or more pure real estate funds. Compared with the previous year, when 29% still said they were exposed to such funds, this shows a significant loss of confidence in the asset class, especially as half of them are still closed."
The number of institutionals choosing not to invest in real estate at all rose noticeably by 17.7 percentage points to 45.7%.
Private equity proved the least popular asset classes, with 65% saying they would not invest in it.