The German investors tend to be as conservative as they come – and as a result they shun volatile equities in favour of the stability of bonds.
Bonds are the largest asset class in German institutional portfolios, but their share has shrunk from 74% in 2011 to 46% at present, according to Union Investment's latest annual risk survey of 106 investors. This is because even bonds are no longer seen as being a risk-free asset class – because of interest rates being so low and the increased possibilities of sovereign default.
Dr Uwe Rathausky (pictured) founded Gané Aktiengesellschaft with Henrik Muhle in 2007 as an investment partnership and the duo has developed a strategy which views equities through the prism of bonds.
“For us, shares are a kind of equity bond,” according to Rathausky. He adds: “The future coupon is dependent on operating...