At the start of this week, German chancellor Angela Merkel announced she would not stand again as chancellor in 2021, meaning the end of her fourth term will see Germany’s first female leader leave politics altogether. 

Angela Merkel

She is to step down later this year as the leader of her party, the CDU, which she has led since 2000. 

While Merkel’s leadership in Europe has been often praised as the European Union has expanded and managed myriad problems – not least the sovereign debt crisis of 2010-11 – recent regional election results in Germany have put her party under pressure.

A disastrous result in Hesse over the weekend was widely seen as the trigger for Merkel’s decision, but tensions had been mounting since her election victory last year. It took several months for the CDU to agree a coalition arrangement with the SPD, after negotiations with other parties failed.

Equity markets

Regardless of recent problems, the Merkel era has undoubtedly been a good one for Germany equity markets. The DAX index rose by 121% from November 2005, when Merkel was elected, to 1 November 2018, according to S&P Capital IQ. The MSCI Europe index is just 11% higher.

German v European equities

Source: S&P Capital IQ

How German and European equities have fared since Angela Merkel first took power

Germany’s cost of borrowing has also fallen substantially in the same period. The yield on a 10-year German Bund was 3.4% in November 2005, but as the country’s economy strengthened and proved resilient in the financial and sovereign crises that followed, investors flooded to the percieved safe haven, pushing the yield down to around 0.4% at the end of October this year.

Germany’s top 10 pension funds in 2005 and 2018

Germany’s top 10 pension funds 2005AUM (€m)
Bayerische Versorgungskammer 36,000
Volksfuersorge Pensionsfonds 23,503
BVV 16,000
Winsecura Pensionskasse 10,853
Siemens Pensions Trust 10,500
Hannoversche Pensionskasse 8,535
VBL 8,000
Nordrheinische Aertzeversorgung 7,112
Aertzeversorgung Westfalen-Lippe 6,390
E.on Energie 6,200
Top 10 total 133,093


Germany’s top 10 pension funds 2018AUM (€m)
Bayerische Versorgungskammer 87,000
VBL 34,300
Deutsche Rentenversicherung Bund 33,097
BVV 28,095
Daimler AG 24,197
Deutsche Lufthansa AG 15,917
Siemens AG 14,622
B-W Aertze, Zahnaertze und Tieraertze 13,966
Nordrheinische Aertzeversorgung 13,709
BASF SE 13,576
Top 10 total 278,479

IPE’s inaugural Top 1000 Pension Funds report was published in October 2000, shortly after Angela Merkel became the CDU’s first female leader.

The first few iterations – including the report published in 2005 – consisted of 750 continental European schemes and a separate list of the UK’s top 250 funds. Germany provided 100 constituents in 2005. 

Since then the methodology of the Top 1000 has changed almost as much as the European pension sector has. This year’s report included 107 German funds as a result of a much broader data set used.

Assets run by the top 10 German schemes more than doubled since 2005, led by BVK, which grew from €36bn to €87bn, making it now the fifth biggest pension fund in Europe. VBL more than quadrupled in size from €8bn to €34.3bn.

See IPE’s Country Report for Germany, published in April, here.

IPE’s Special Report on German Asset Management from the October magazine is available here.