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Germany’s BVK has smooth asset transition

GERMANY – The 29 billion-euro BVK, or Bayerische Versorgungskammer, says the transition of assets to its new array of external managers has gone very smoothly.

BVK is Germany’s largest pension fund for 12 different occupational groups with 1.15 million contributing members. It has total assets of 29 billion euros and transitioned around two billion euros in assets to 17 different management firms based in Germany and elsewhere last week.

“We were fortunate the particular day was a quiet one for the markets, which helped us,” said Daniel Just, managing director of the Munich-based pension fund’s capital investment department. Everything seems to have gone according to plan, he adds. The transition manager involved is the team at Deutsche Bank.

The transition was the final stage of a major restructuring of BVK’s approach to running its portfolios of equity assets. This started around a year and half ago, says Just. A new structure has been put in place using a global custodian and a Master-KAG fund structure.

Frankfurt-based BNP Paribas was appointed global custodian and Universal as the administrator of the Master-KAG following beauty parades.

Earlier this year, BVK conducted a review of its approach to running its assets and its external manager relationships, using the services of consultants Alpha Portfolio Advisers. Initially five master funds have been established across a range of equity classes involving 17 managers.

One of the aims of the new structure is to provide the 12 different pension funds which are part of BVK with the ability to have equity allocations in line with their own requirements, says Just.

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