The Munich Public Prosecutor’s Office yesterday raided the offices of Deutsche Finance Group as part of an ongoing legal row between the German asset manager and Bayerische Versorgungskammer (BVK) over a US real estate investment.
In a statement, Deutsche Finance confirmed that a search was conducted on 3 November by the German’s city’s investigative authorities, including the police, in connection with the management of the €122bn pension fund BVK’s US real estate portfolio.
The group said its offices were searched in the capacity of a “third party” and the asset manager said it was cooperating with the investigative authorities and had been in contact with them for some time.
According to reports in the German media, the investigation concerned allegations relating to the possibility that Deutsche Finance may have bribed employees of BVK with trips and other fringe benefits.
BVK declined to comment on the raid and the investigation.
The legal battle escalated recently following a lawsuit filed by Deutsche Finance against BVK in the US state of Delaware’s Superior Court concerning the responsibility for an approximate €853m of losses resulting from investments in US real estate.
The asset manager claims BVK is seeking to blame it for losses linked to real estate investments in the US through “false and damaging representations”. BVK denies the claim.
Alongside, Germany’s financial supervisory authority BaFin has requested information from Deutsche Finance in terms of its real estate investments.
Deutsche Finance said that the supervisor requested to assess whether the management of the closed-end public funds by Deutsche Finance Investment had been conducted in a proper manner. The German asset manager said it would give the investigation its full support.
