WEST PALM BEACH, FL (www.hedgeco.net) – German Insurance Companies pumped in E5 billion into hedge fund management portfolios in 2004 according to new data released by the Berlin based industry tradegroup, GDV. According to Ulrich Krueger, the head of the investment department at the Berlin-based GDV, German based Insurance companies invested about E5 billion into hedge funds in 2004. Suchinvestment represented nearly 0.5 percent of its total assets invested in hedge funds.

For some time industry analysts said the German hedge fund investors are not yet ready for hedge fund investments. Many expected a mad rush in Germany following regulatory approval recently granted to hedge fund managers to market their products to the German retails investors.

Few years ago, the German Financial markets regulator, BaFin granted its approval to Germany�s first two hedge funds. A unit of Deutsche Bank, DWS was first granted the approval to begin issuing an umbrella of hedge fund of funds.

However following that initial announcement, German investors failed to capitalize on such approval to gain access into hedge fund management portfolios. Some argued that investors were taking the go slow approach since many needed additional information and knowledge about hedge funds and their methods of doing business. Recently the head of BVI, the German Hedge Fund Industry Association came to the defense of hedge funds, amidst critics� charges that hedge funds flopped in Germany. Alex Benkner, the head of BVI explained that hedge fund products need a long lead time which requires industry to take a longer view in terms of investor demand for such products. Benkner said, �With respect to larger volumes for hedge funds, we think that the time for this still lies ahead of us.�

While individual investors are still gearing up for hedge fund investments in Germany, institutional investors seem to sending signals that it is ready for more aggressive hedge fund investments. It remains to be seen if 2005 will be a more active year for the German hedge fund market.

Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net

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