A total of 106 institutional investors were surveyed for the BAI Investor Survey 2022, who together manage more than €2.1 trillion in assets under management. The survey revealed that more than 23% of these assets are now invested in alternative asset classes, and three-quarters of German investors are already invested in three or more alternative asset classes.
Alternative asset classes: ESG as a growth driver
Almost all asset classes are recording significant growth, especially in infrastructure investments and in the field of renewable energies. In general, sustainability and ESG are currently very popular with investors. More than two-thirds of respondents say they have a clear ESG strategy, a slight increase from the 2021 survey. The primary drivers for ESG-compliant investments are intrinsic interests, stakeholder expectations, reputational risk avoidance, risk management and regulatory requirements. This applies to both investors and asset managers. However, one third of the respondents assume that ESG-compliant investments partly mean a loss of returns.
Poor marks for Germany as a fund location
Another interesting aspect of the study is that German fund structures play only a minor role here. In view of the dominance of foreign, primarily Luxembourg-based vehicles in fund structuring in the field of alternative investments, the study explicitly asked this year for the reasons, especially since there have recently been various efforts to improve both tax law and supervisory law in Germany in order to strengthen the German location (keyword: Fund Jurisdiction Act).
However, the results of the survey provide a sobering picture here. More than 80% of the investors surveyed stated that German funds or fund structures play no or only a subordinate role for investments in alternative investments, at best in the context of a master fund. From the investors’ point of view, investment tax law (41%) and investment regulatory law, i.e. the KAGB (38%), speak against German funds or fund structures. More than a quarter of the participating investors also criticise the unequal treatment of funds in the taxation of management fees, which is generally not granted to AIFs – with the exception of open-ended special AIFs with fixed investment conditions – and thus puts them at a competitive disadvantage.
To the study
The BAI Investor Survey has been an essential part of the research activities of the German Alternative Investments Association since 2013. The framework conditions for institutional investments in Germany are subject to constant dynamic change. Therefore, the questionnaire is continuously updated and adapted to the needs of investors and the now more than 270 BAI member companies. The aim of the association’s work is to improve public perception, to create internationally competitive and attractive framework conditions for alternative investments and to represent the interests of the industry vis-à-vis politicians and supervisory authorities. Learn more about the BAI