AUSTRIA – The €250m pension fund for Austrian lawyers is "carefully considering" making its first foray into real estate or infrastructure.

The pension system for lawyers in Austria is founded on two pillars – both mandatory and organised by their local chambers independently of the state system or other Pensionskassen. 

The funded pillar, set up in the late 1990s, collectively manages €250m in assets for 5,500 lawyers who pay a fixed rate of contribution set by their chambers in each of the nine provinces.

Assets are managed via Spängler in a KAG by four asset managers with "very diversified investment approaches", according to Christian Winder, chairman of the investment board at the pension fund.

Macquarie Investment Management, Spängler IQAM, Lazard Asset Management and DALE Investment Advisors manage the majority of assets in an absolute return strategy – or rather a "no losses over two years" fund, according to Winder.

"These manager practically show no correlation," he added, "and it is very interesting to see which manager contributes to the return in which market phase."

In theory, the fund could invest 10% in hedge funds, but, as of the end of June, the alternative investment share was just 0.6%.

Alternatively, the investment board, consisting of nine lawyers and two representatives of Spängler, is "carefully considering" investments in real estate.

Winder said plans by the Austrian government to involve pension funds in long-term investment projects such as motorways or housing projects "might [also] be interesting".

"We have to check carefully under which conditions these investments are offered, but, if they come with an adequate illiquidity premium, it might be interesting," he said.

The VBV Pensionskasse recently rejected the government's proposal on pension funds buying affordable housing bonds due to low yields.

The lawyers' pension fund could also add more risk by switching to a fund with a 30% or a 50% unhedged equity exposure since 2007, in addition to selecting the safer option of the AVO Classic fund with the absolute return strategy.

This is similar to the life-cycle model introduced under the PKG-Novelle, the recent amendment to Austria's law governing pension funds.

"The law implemented what we have had in place for some time now," Winder said.

Legally, the lawyers' pension fund is not bound by the PKG, as it was created under the lawyer's statutes, but the fund is nonetheless "orientated" towards the reform.

Winder explained that most people remained in the default option when the other two funds were introduced six years back.

To prevent "damage from inertia", people are automatically switched to the AVO Classic option on retirement – "unless they actively opt out", Winder said.

For 2012, the AVO classic returned 4.6% and the other two funds "considerably more", but, for 2013, Winder expects a lower return.

IPE and Stirling Capital Partners are co-hosting a conference, Infrastructure for Pension Funds and Other Capital Owners, to take place on 2 October in London. For more information, visit