SOKA-BAU, the German umbrella organisation for two pension funds for employees in the construction industry, has started a private debt investment programme to reach the strategic allocation quota of 5%, Gregor Asshoff, member of the group’s management board responsible for asset management, told IPE.

“The investment programme is currently being launched, and is strategically designed to have a share of around 5% [of total assets]. We assume that we will start this year with a share of around 1%,” he said.

The scheme had decided last year to postpone an initial investment in private debt.

ZVK – the supplementary pension fund for the construction industry and the largest among the two under management by SOKA-BAU — continues to pursue a strategy targeting 20% of its assets in equities, 35% in fixed income, 25% in real estate, 15% in private equity and infrastructure, and 5% in private debt.

“We follow a strategic approach to build a diversified, risk-adjusted portfolio across all relevant asset classes worldwide. The allocation has also progressed in 2024 in line with our targets,” Asshoff added.

The scheme intends to build up allocations to alternatives and, based on its strategic asset allocation, cut its real estate investments and bonds. It plans to sell real estate assets directly held through ULAK, the holiday and wage compensation fund for the construction industry, the other fund managed by SOKA-BAU, according to the scheme’s 2023 financial statement.

Meanwhile, ZKV will continue to strengthen its equity, bonds, and alternative – primarily private equity and infrastructure — portfolios, the statement added.

Asshoff said there were currently “no plans” to add new asset classes.

Equity investments contributed the most to the scheme’s performance so far this year, with assets increasing in the first six months of this year, from a total of €14.2bn recorded at the end of December last year, he said.

“We expect growth of around €800m [in terms of AUM) in 2024,”  Asshoff added.

Assets in the ZVK fund increased by €763.7m to €9.77bn last year, with total gains from investments up from €322.2m in 2022 to €348.6m in 2023, according to the statement.

ZVK’s invested assets are expected to increase by €760-820m in 2024. Assets in the ULAK fund increased to €3.08bn last year, from €2.93bn in 2022.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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