WEST PALM BEACH, FL (HEDGECO.NET) – According to new estimates by Mercer consultant, the German hedge fund markets could grow to 20 billion euros in the next five years. Institutional investors inGermany still view hedge funds as too risky; many of those managers do not understand the different investment strategies employed by hedge funds to carry on their business, according to HerwigKinzler, head of the investment consulting practice in Germany.
The German hedge fund industry regulator, BaFin, earlier in January, granted hedge fund operators the permission to set up and market hedge fund portfolios in Germany. BaFin approved single hedge funds in February. The hedge fund asset management business in Germany is still in its infancy stages, according to published reports. Currently only a small number of the German investors have made hedge investments.
According to Kinzler, the German hedge fund regulator will be issuing new rules on how pension funds, as well as insurance establishments, can invest assets into hedge fund management portfolios. Kinzler, said, �This is a major step in granting the opportunity in diversifying German institutional investors portfolio, even if the initial investment limits are restrictive, adding, �We believe that this development might add importance to the debate and accelerate allocation to hedge funds.�
While the regulator might limit pension funds from investing more than 5% of their assets in hedge funds, Kinzler argued that even if pension funds devote 2% of their assets in hedge fund strategies over the next five years. That could boost total hedge fund portfolios in Germany to about 20 billion euros by 2009.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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