Strengthening Capital Markets: Germany Needs More Institutional Investors

Too few institutional investors are prepared to invest in young and innovative companies. This hampers the long-term growth prospects of the German economy. Instead, institutional investors in Germany hold more conservative portfolios than their European counterparts, investing heavily in bonds. Building up supplementary funded pensions and removing barriers to investing in riskier but growth-enhancing activities can help mobilise more growth capital in the long term.