The German pension fund MetallRente has said it is embarking on a new strategy to seek out revenue.

The firm’s managing director, Hansjoerg Muellerleile, told the German news website Top 1,000 Funds that MetallRente was launching a new €8bn insurance portfolio that includes an equity offering. This new allocation, he said, was to be outsourced to Allianz Global Investors, which will be the sole asset manager for the portfolio.

The firm reportedly waited to launch its insurance/equity model because it felt it could gain more benefits from being a follower of the rest of the industry rather than a leader.

Muellerleile told Top 1,000 Funds: “We learnt two things from waiting. We gained insights into how the market was developing around us, and we grew confident that our customers would want the product because of its low cost and simplicity.”

The new product offers global, passive, equity exposure of between thirty and forty-five per cent, a ratio that is automatically scaled according to a beneficiary’s age. Meanwhile, scaling up equity risk involves lowering the insurance-based guarantee from one hundred to eighty per cent.

All this comes a few weeks after the firm said it had seen an increase of just over one million contracts for funded retirement provision in 2023 or 2.8 per cent of the total. The portfolio of MetallRente contracts for company pension schemes increased by 4.2 per cent in 2023.

In addition, MetallRente was able to further expand its distribution in the metal and electrical industry and the associated sectors, including steel, textiles and clothing, IT, wood, and plastics. In 2023, 8,265 customer companies had a new registration with MetallRente for the first time.

This was, it said, a significant increase in customers compared to 2022.

The firm’s website says it is Germany’s largest pension fund with more than a million insured people. It was founded around twenty years ago after the collective bargaining agreement Gesamtmetall and IG Metall for companies and employees in the metal and electrical industry. However, it now represents many sectors of the economy.

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