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German Pension Fund Feri AG Targets Infrastructure Boost by 2026

Frankfurt - Leading German pension fund manager Feri AG is planning to significantly increase its allocation to infrastructure investments over the next four years, underscoring the growing appetite among European institutions for the asset class.

Feri, which oversees €80 billion in assets, aims to raise its infrastructure weighting from the current 5% to 10% of its total portfolio by 2026, according to Servane Burret, the firm's head of real assets. This would equate to around €8 billion invested in infrastructure strategies.

"Infrastructure has become a vital component of our overall asset allocation as we seek stable, inflation-linked returns to match our long-term pension liabilities," Burret told Infrastructure Investor. "The sector's defensive qualities and diversification benefits make it an increasingly attractive proposition, especially in the current market environment."

Feri's infrastructure push comes amid a broader shift among European pension funds towards the asset class. A recent survey by industry group EDHEC found that more than half of continental European institutions plan to increase their infrastructure allocations over the next 12 months.

This trend reflects infrastructure's ability to provide steady cash flows and partial protection against inflation - key priorities for pension funds facing rising liabilities and market volatility. Investor appetite has been further stoked by the EU's €800 billion NextGenerationEU stimulus program, which is pouring billions into green energy, transportation and digital infrastructure projects across the continent.

Feri's infrastructure investments will span both brownfield operational assets and greenfield development projects, with a focus on renewable power, transportation, and digital infrastructure, Burret said. The firm will allocate capital across both unlisted funds and direct co-investments, leveraging its extensive network of relationships with leading infrastructure managers.

"We're seeing a very robust pipeline of attractive opportunities, particularly in the renewable energy space as Europe accelerates its energy transition," Burret noted. "But we'll remain highly selective, maintaining our disciplined underwriting approach to ensure we generate the risk-adjusted returns our pensioners expect."

The infrastructure push is part of a broader strategic shift at Feri, which is also ramping up its allocations to private equity, private debt, and real estate to diversify beyond its traditional public market exposures. The firm has set a target of having 50% of its total portfolio in alternative assets by the end of the decade, up from around 30% currently.