Private Equity and Hedge Funds to Attract more Investments from Germany’s biggest public pension fund
Private equity and hedge funds are attracting more investments from Germany’s biggest public pension fund, which plans reduce its bond holdings as low interest rates curb returns.
“We
started committing the first funds to private equity in 2007 and we are
now beginning to reap the first rewards,” said Andre Heimrich, chief
investment officer of Bayerische Versorgungskammer, in an interview in
Munich. “There is still room for expansion and we could imagine doubling
our share of private-equity investments.” BVK currently has about 4
percent of its assets committed to buyout funds.
BVK,
which had 60.5 billion euros ($76.5 billion) in assets at the end of
August, manages 12 pension plans overseeing compulsory retirement funds
for doctors, architects, lawyers, Bavarian lawmakers and chimney sweeps.
The company, part of the state of Bavaria’s interior ministry, is also
seeking more investments in infrastructure, hedge funds and real estate.
“The
current low interest rate environment will persist for some time,” said
Heimrich, who took over as CIO from Daniel Just, now BVK’s chief
executive officer, in February 2013. “In Germany, we even might not have
reached rock bottom yet.”
Source: Bloomberg
