Hoechst Group Workers’ Pension Fund, a Frankfurt-based German multi-employer occupational pension provider, said in its 2023 financial statements that it is focusing this year on new direct investments, mainly in bonds with higher credit ratings.
Instead, the pension scheme suspended new investments in real estate, investment funds and alternative asset classes.
Hoechst Group Pension Insurance expects a decline in real estate valuations in 2024, which could affect dividends from indirect real estate investments, adding that it has stepped up investments in high-quality registered bonds (Namensschuldverschreibungen) in 2022 and 2023 amid rising interest rates.
Investments in registered bonds will increase from €1.05 billion in 2022 to €1.21 billion in 2023, the statement said.
The firm noted that investments in “traditional” bonds such as German Pfandbrief and registered public bonds, banks and companies with high credit ratings have become more attractive, with coupons ranging from 3.5% to 4.7%.
The pension provider said infrastructure remains an asset class “that is increasingly attracting public attention, with regulators and legislators acting to encourage investment in light of Germany’s fiscal austerity”.
Pension fund assets will increase by a total of 226.2 million euros (7.7 percent year-on-year) to 3.17 billion euros in 2023, compared with 12.5 percent the previous year, according to the statement.
According to figures from the statement, the bank has invested €308.5 million in real estate, €1.28 billion in shares and investment funds, €119.2 million in mortgages, €1.34 billion in registered bonds and promissory notes and €114.5 million in deposits with credit institutions.
Donation income is expected to increase from 168.4 million euros in 2022 to 173.3 million euros in 2023, exceeding expectations.
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