Deutsche Finance Group and Germany’s largest pension institution, Bayerische Versorgungskammer (BVK), are trading accusations over losses linked to US real estate investments, in an escalating legal battle.
Deutsche Finance Group filed a lawsuit this week against BVK in the Superior Court of the State of Delaware. BVK manages €122bn on behalf of pension funds for professionals in Bavaria.
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”.
Deutsche Finance said in a statement that the losses were also caused by BVK’s own decisions and omissions.
The asset manager alleged that, instead of assuming responsibility, BVK had conveyed a misleading impression to influential German media outlets, regulatory authorities, the Bavarian State Parliament and its own members that Deutsche Finance Group, rather than BVK, had selected the investments in question and was responsible for the resulting losses.
According to the complaint, BVK has invested just under $2bn in US real estate over the past decade, with projects in California, Illinois, Florida and New York. Deutsche Finance was involved as asset manager.
The pension fund allegedly went beyond the role of a passive institutional investor, selecting properties, approving investments, negotiating fees and controlling decisions on leasing, financing and pricing at individual-property level, according to Deutsche Finance.
BVK subsequently instructed Deutsche Finance and independent fund managers to implement those decisions, the asset manager alleged.
The complaint said that, as US commercial real estate markets weakened from 2020 onwards, budgets, financing and lease agreements became dependent on BVK’s approvals or provision of capital because of the prevailing decision-making structures.
The lawsuit estimates total potential losses across BVK’s US investments up to approximately €853m.
BVK told IPE in a statement that it “categorically rejects the allegations”, which it described as “yet another attempt by Deutsche Finance to divert attention from its own responsibility and its numerous, publicly known challenges”.
BVK will “vigorously defend itself” in the interests of its members and beneficiaries, the statement added.
Deutsche Finance Group is seeking compensatory damages, with the amount to be determined in a jury trial.
Earlier this year, Deutsche Finance filed another lawsuit in New York, in which it accused BVK of going to “concerted, conspicuous lengths to evade its contractual obligations” to the firm to avoid paying approximately $31.3m in management fees following the sale of Transamerica Pyramid Center, a San Francisco skyscraper, in March 2026 to Cyprus-based investment firm Yoda. At the time, BVK rejected allegations of misconduct.
