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Steffen Gnutzmann Benedicte Gravrand, Opalesque Geneva: Due to regulatory pressure, most large institutional investors in Germany, especially insurance companies, have between 75 and 85% of their allocation in safe bonds, and eschew riskier investments. Those who could invest in alternatives are too cautious to do so. Regulations also limit institutional investors’ offshore investments, so within hedge funds, they can only opt for UCITS hedge funds.
"All of those regulatory restrictions build up to a limitation of the options or the pool out of which the institutional investor can fish, I would say not by half, which would be bad enough, but probably by 90%," says Marcus Storr, head of the Hedge Funds / Alternative Department at FERI, a German asset manager with $27 billion of discretionary assets under management, during the recent Opalesque Germany Roundtable.
The regulators believe they are protecting institutional investors, notes Amin Obeibi, the Global Pension Fund Manager for the NSN Pension Trust. That would be good if the environment was full of investment opportunities and yield. But in today’s environment, where it is hard to find the last basis point in returns, it is stressful for investors, who are cut off from complete parts of the global investment markets and hundreds of managers. Furthermore, many fund managers refuse to have German investors.
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