Nearly three-quarters of German investment professionals would back the creation of a sovereign wealth fund (SWF) to help address the country’s infrastructure needs.
The German Federation of Financial Analysts and Asset Management (DVFA) found that 68.6% of its members backed the creation of a SWF that could help with “targeted, direct investments”, according to the association.
It noted that the countries traditionally associated with such funds financed them by putting aside their budget surplus.
The German federal government is not currently in surplus, but, in accordance with a new law, it will not take on any new debts this financial year.
Due to the lack of surplus, only 18.5% of respondents thought the creation of a German SWF likely, and nearly 22% thought the government was unlikely to pursue such an approach.
Ralf Frank, general secretary at the DVFA, said the question of how to finance a SWF was a hurdle that would need addressing.
But he backed the idea of increased investment in infrastructure.
“In any case,” he said, “both public and private investment must be mobilised in a more targeted fashion to drive the modernisation of German infrastructure.”
The question of how to attract greater institutional capital to German infrastructure is already being examined by German finance minister Wolfgang Schaüble, who last year said he was looking to remove “unnecessary regulatory hurdles” for investors.
Germany is not the only European country to consider the launch of a SWF.
The UK government said in its March Budget that it would consider the launch of a sovereign fund aimed at allowing local communities to benefit from the exploitation of shale gas.
It has yet to publish concrete proposals.
