The Versorgungswerk der Zahnärztekammer Berlin (VZB), the pension fund for dentists in Berlin, Bremen and the state of Brandenburg, has dismissed director Ralf Wohltmann, following reports on controversial investment decisions, according to WirtschaftsWoche magazine.
The scheme did not reply to a request for comment from IPE.
VZB is facing losses after investing in now insolvent insurtech start-up Element Insurance.
Insolvency administrator Friedemann Schade confirmed to the Frankfurter Allgemeine Zeitung that averting Element Insurance’s insolvency was no longer possible. VZB is one of the main investors in the Berlin-based start-up, and took part in a €21.4m funding round in 2022, according to reports.
There are also indications of possible conflicts of interest relating to some of the pension scheme’s investments, IPE understands.
The scheme had to write off assets worth around €64.93m in 2023, and €45.98m in 2022, according to its 2023 financial statement.
VZB had assets worth around €2bn in 2023, on par with the amount recorded the prior year.
Returns on assets invested have decreased over the years, from €124.94m in 2021, to €95.20m in 2022, and to €83.62m in 2023, according to the scheme’s financial statement for 2023.
VZB invested 26.30% of its assets in real estate, 19.67% in affiliated companies, 12.39% in private equity, around 18% in loans, 1.52% in bearer bonds, 3.44% in registered bonds, 11.97% in promissory notes, 0.10% in equities, and 6.61% in investment funds, according to the statement.
As part of its liquidity requirements, the dentists scheme had to continue to shrink its direct bonds portfolio in favour of other asset classes, despite the attractive interest rate level, according to the fund’s 2023 financial statement.
Real estate investments were reduced in the context of sales opportunities, it added.
The regulatory share of private equity investments, which also takes into account investments in real assets, continues to represent a major focus of VZB’s asset allocation, the statement noted, adding that, with available liquidity, the focus is on rebuilding its direct bonds portfolio.
Pension funds for professionals have changed their investment strategies in recent years as a result of the low-interest-rate environment, and low returns on government bonds.
Schemes have increased investments in real estate, private equity and infrastructure in recent years. Pension fund members, however, are concerned about disappointing returns recorded by the scheme, according to reports.
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