Germany’s Asset Management Sees 9% Growth in 2023: BVI Report

Discover the significant increase in assets under management for private and institutional investors in Germany, reaching €4,149 billion in 2023, as reported by the German Investment Funds Association BVI.

Germany's Asset Management Sees 9% Growth in 2023: BVI Report

In 2023, the assets under management for private and institutional investors in Germany saw a significant increase of 9%, reaching a total of €4,149 billion, as reported by the German Investment Funds Association BVI. This growth was driven by a turnaround in open-ended retail funds, which attracted €12.9 billion in new investments, following a €3.4 billion outflow in 2022, according to data from BVI. Institutional sales also saw a positive trend, reaching €49.5 billion, with open-ended Spezialfonds accounting for €33.7 billion, mandates for €10.9 billion, and closed-ended Spezialfonds for €4.9 billion.

Looking ahead, BVI anticipates that this positive trend in fund sales will continue into 2024. However, the association has also called for the regulation of ratings agencies to be tightened, emphasizing the need for greater oversight in the industry.

Open-ended Spezialfonds emerged as the dominant fund group, managing €2,079 billion in assets, along with €634 billion in mandates. Retail funds followed with €1,382 billion, while closed-ended funds handled €54 billion. In terms of retail sales, equity funds led the way with €12.9 billion in inflows, driven by global equity funds attracting €16.9 billion. However, Germany-focused equity funds experienced an outflow of €3.2 billion. Additionally, ETFs received €10.2 billion in inflows, while actively managed equity funds attracted €2.7 billion.

Bond funds also rebounded in 2023, attracting €12.7 billion in new investments after experiencing a €16.5 billion outflow in the previous year. Corporate bond funds led the way with €4.9 billion, followed by euro bond funds with €4.5 billion. Bond ETFs also saw significant inflows, pushing total bond fund assets to €211 billion.

On the other hand, property funds saw a decline, attracting only €0.1 billion in new investments in 2023, managing net assets of €131 billion. Balanced funds also experienced outflows of €15.5 billion. Open-ended Spezialfonds attracted €33.7 billion in inflows, a significant decrease from the previous year's €62.7 billion.

In terms of assets under management, retirement benefit schemes lead the way with €716 billion, followed by insurance companies with €541 billion in Spezialfonds investments. Together, these two entities hold 60% of the total assets, underscoring the significant role of the asset management industry in old-age provision in Germany.

The asset management industry in Germany experienced notable growth in 2023, with open-ended retail funds and institutional sales driving the positive trend. However, there were also areas of decline, particularly in property funds and balanced funds. Looking ahead, BVI has called for tighter regulation of ratings agencies to ensure greater oversight in the industry.