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BarmeniaGothaer Asset Management, a newly established firm from the merger of two German insurers, is reevaluating its investment approach. The company plans to transition away from external asset managers for its corporate bonds portfolio and adjust its allocation towards securities that benefit from rising interest rates. With an expanded workforce and a broader range of asset management capabilities, the firm aims to enhance its direct management of various asset classes. This strategic shift also involves reducing exposure to alternative investments while increasing focus on government bonds and renewable energy projects.

Enhancing Direct Management Capabilities

The formation of BarmeniaGothaer Asset Management has significantly bolstered its operational capacity. The company now oversees assets totaling approximately €50 billion, with a notably larger team. This expansion allows the firm to manage a wider array of asset classes internally, particularly in areas like corporate bonds. Christof Kessler, co-CEO responsible for investment decisions, emphasized the new team's ability to handle specific types of investments without relying on third-party managers. This change reflects a move towards greater autonomy and control over investment strategies.

In detail, the firm intends to allocate around 14% of its total assets to corporate bonds, leveraging its enhanced internal expertise. Previously, Gothaer Asset Management had diversified into alternative assets such as natural capital and venture capital. However, the merged entity will pivot away from these sectors, opting instead to focus on more traditional securities. The decision to manage corporate bonds directly stems from the firm's growing capability and the changing financial landscape, including rising interest rates. This shift aims to optimize returns and reduce dependency on external managers, thereby streamlining operations and potentially lowering costs.

Strategic Reallocation of Investments

BarmeniaGothaer Asset Management is strategically reallocating its investment portfolio to align with current market conditions. A significant portion of the funds will be directed towards government and related bonds, accounting for about 30% of the total assets. Additionally, €3 billion is earmarked for renewable energy projects, reflecting the firm's commitment to sustainable investments. This reallocation strategy underscores the company's adaptability and forward-thinking approach to managing its extensive portfolio.

Historically, Gothaer and Barmenia had substantial investments in German real estate and infrastructure. Even before the merger, both entities were exploring opportunities abroad to diversify their holdings. Post-merger, this international diversification remains a priority. While the firm will continue to use third-party managers for certain overseas investments, it does not plan to directly invest in companies or real estate. Instead, the emphasis will be on adjusting the portfolio composition to capitalize on rising interest rates and sustainable energy initiatives. This strategic redirection aims to mitigate risks associated with alternative investments and position the firm for long-term stability and growth in a dynamic market environment.