German companies are eyeing European Long-Term Investment Funds (ELTIFs) as a new route to bring illiquid assets into their defined contribution (DC) pension plans.
ELTIFs are “coming right now” to DC plans of German corporates, said David Erichlandwehr, head of corporate clients team for Germany, Austria and Eastern Europe at BlackRock, speaking at the Handelsblatt occupational pension forum in Berlin last week.
He added that the use of ELTIFs, alongside exchange-traded funds (ETFs) typically aimed at retail investors, is expected to rise within corporate pension schemes.
German employees who voluntarily channel part of their salary into occupational pensions through deferred compensation are looking for cost-effective products that are transparent and generate returns, Erichlandwehr noted.
Private banks are already providing staff access to private equity and infrastructure via ELTIFs, he said, before suggesting: “Why don’t we do this also in occupational pensions?”
Asset managers in Germany are shifting their focus to professional investors as ELTIFs gain traction. Around 78% intend to offer ELTIFs to this segment, according to a survey by alternative investments association BAI.
A report by Scope shows that the market has expanded rapidly, with at least 82 ELTIFs launched this year across Europe – a record high compared with 55 in 2024. Scope forecasts moderate growth, with between 200 and 300 ELTIFs expected by 2027.
ETFs already gaining ground
ETFs, meanwhile, are well-established in German corporate schemes, especially among DAX and MDAX companies, according to Erichlandwehr.
Yet, he said “the doors are extremely wide open” to further adoption, citing a recent BlackRock survey showing that 38% of employees would allocate part of their second-pillar savings to ETFs.
The same survey found 53% of respondents view occupational pensions as the most tax-efficient way to save for retirement, and consider company schemes “solid”.
German pension funds already use index-tracking ETFs as a liquid and efficient implementation tool, according to a paper published last month by the asset management association BVI.
The association has also partnered with Clearstream to deepen transparency in ETF market structure, noting Germany’s market share of 23% makes it the largest in Europe.
The German ETF market has grown 62% between June 2023 and June 2025 to €500bn, out of a European total of €2.2trn. BVI expects ETFs to play an increasingly important role in pension systems across Germany and Europe.
The latest digital edition of IPE’s magazine is now available
