Private Equity and Hedge Funds to Attract more Investments from Germany’s biggest public pension fundPrivate 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