Business & Finance
Munich Prosecutors Raid BVK Pension Fund Over Loss‑Making US Property Deals
Munich prosecutors raided the German pension fund group BVK two days after they searched the asset manager Deutsche Finance Group (DFG) as part of a corruption investigation. The probe targets a former and a current BVK employee who handled property investments and a member of DFG’s management. Three private apartments in and around Munich were also searched. The investigation focuses on “loss‑making” investments by BVK in seven real‑estate projects in New York, Miami Beach, Beverly Hills, Chicago and San Francisco, carried out with DFG’s involvement. BVK has flagged large losses on a portion of its US properties linked to DFG and the real‑estate development firm SHVO, owned by New York developer Michael Shvo. BVK manages €122 billion in retirement assets for 2.8 million people in Bavaria, making it Germany’s largest public‑sector pension group. Investigators suspect the BVK employee exerted “improper influence” on the fund’s real‑estate investments and on decisions to provide additional capital to keep the projects running. In return, he allegedly accepted benefits for himself and others from a DFG manager, including invitations to high‑end restaurants in Munich, London, Los Angeles and New York and stays in a luxury hotel suite in New York. BVK has warned that it may write off as much as €853 million of the roughly €1.6 billion invested in those properties, with €392 million already written off by the end of last year. The Munich prosecutors did not mention Shvo or his firm in their communications, and neither has been accused of wrongdoing. BVK and Deutsche Finance did not immediately respond to requests for comment.
Frequently asked questions
Why were BVK and DFG searched by Munich prosecutors?
The probe focuses on loss‑making investments by BVK in seven US real‑estate projects carried out with DFG’s involvement, and on alleged improper influence by a BVK employee.
How much loss has BVK reported on its US properties?
BVK may write off as much as €853 million of the roughly €1.6 billion invested, with €392 million already written off by the end of last year.
What assets does BVK manage?
BVK manages €122 billion in retirement assets for 2.8 million people in Bavaria, making it Germany’s largest public‑sector pension group.