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German AIF growth defies Covid-borne economic slump

Germany’s open-ended special property AIFs have defied the Covid-19 pandemic and have continued to draw positive net inflows.

According to the third-party AIFM Intreal, an analysis of Bundesbank statistics shows that in the second quarter of 2020 there were net inflows of about €2 billion, unchanged on the same period of the previous year.

Intreal managing director Michael Schneider said that only in March was there a net outflow – €44 million. He added that the figures for April, May and June saw significant inflows, respectively, of €660 million, €740 million and €586 million. “In view of the economic slump of 10.1% of gross domestic product (GDP) in the second quarter, these results are very pleasing.”

Schneider also said that in the context of the period since 2013 the fluctuation caused by the current crisis are not significant.

“A longer-term view shows that monthly inflows are generally rising. Whereas in 2014 the moving 12-month average was still around €500 million per month, this figure steadily increased in the following years. At the end of 2019, it crossed the mark of €1 billion per month. This trend will not be interrupted by the coronavirus crisis, either,” Schneider added.

He also said that institutional investors are reallocating assets in the crisis, withdrawing funds from securities-based funds in favour of property funds.

Open-ended special property fund assets have also continued to grow during the pandemic. From their pre-crisis level of €124.3 billion at the end of March 2020, they reached €127.1 billion by the end of June.

“The figures show that property investments remain in high demand and industry assets are continuing to increase. However, a slight dip in this growth can be seen from February 2020 onwards as compared to the very good year 2019. This is where the impact of the pandemic is reflected in the statistics,” Schneider said.

Michael Schneider, managing director, Intreal.

But Intreal pointed out that the number of vehicles has also increased with the roll call of open-ended special property funds rising from 540 to 547 between March and April, an increase of seven compared to 20 in Q1 2020.