The pension fund for Hamburg U-Bahn operator Hamburger Hochbahn is expected to invest more in infrastructure following changes to investment rules for Pensionskassen, a type of occupational pension vehicle in Germany.
Frank Oliver Paschen, board member of Pensionskasse der Hamburger Hochbahn Aktiengesellschaft, has welcomed recent reforms by German finance ministry to allow Pensionskassen to allocate 5% to infrastructure.
The update, which comes just weeks before the country’s snap elections, also raises the risk capital quota from 35% to 40%.
The future of the bill was uncertain following the German government coalition’s collapse in November 2024, disappointing Pensionskassen boards that had spent years lobbying for increased investment flexibility. The approval this month came as a surprise.
“This is amazing news,” wrote Paschen in a LinkedIn post. Speaking to IPE Real Assets, he said: “We will start looking into this asset class now and maybe start investing in the second half of 2025.”
Historically, the Hochbahnen Pensionskasse has had a 35% allocation to real estate. Under the previous rules, infrastructure investments would have been grouped within this quota, limiting diversification.
Now, the fund can consider investments ranging from wind and solar energy to roads, rail, tunnels and toll infrastructure, Paschen said.
Paschen was enthusiastic about the increase in the risk quota. The changes will make it easier for small insurers and Pensionskassen to invest more in riskier asset classes such as venture capital.
“I am most glad about the increase to the risk quota,” said Paschen. “This has held back Pensionskassen like us that are investing offensively.”
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