It took two years, but now it's happening. The Pension Institution of the Federal and State Governments (VBL) is soon to face court action over accusations of opacity. Activist Arne Semsrott from the NGO „Frag den Staat“ had already sued the VBL in January 2023 – based on the Freedom of Information Act – before the Karlsruhe Administrative Court.

The previously very secretive pension institution is being asked by the plaintiff to provide more detailed information about the investment portfolio it runs within the framework of occupational pension schemes for public service employees. This concerns a capital stock with a market value that, according to the supplementary pension fund, is around 65 billion euros. The pension institution, which is responsible for more than 5 million public sector employees, is the largest German pension fund by a wide margin.

The Karlsruhe Administrative Court has now scheduled a hearing. According to a court spokesperson, the judge’s decision will be made on July 16. Both the plaintiff and the defendant will be present.

According to the VBL, it has only been investing in private equity since the summer of 2022. Besides committing capital to funds, it also acts as a co-investor. Since early 2024, it has been increasingly investing in infrastructure equity. The Strategic Asset Allocation (SAA) for 2025 includes target allocations of 1.8% for (corporate) private equity and 2% for infrastructure equity. These quotas are reviewed annually, „and we expect them to rise slightly in the future.“

In 2024, capital commitments of around 1.5 billion euros were made, compared to around 1 billion euros the previous year. In the future, this amount is expected to at least double. Thus, the VBL is likely to be courted by representatives of private equity firms at the world’s most important private equity conference, „Super Return“, in Berlin in June. Many of these firms are currently struggling with fundraising issues.

The exact scope of the private equity investments remains unclear. „It also depends on how the VBL's capital stock develops“, says Niklas Becker, Head of Private Equity. He previously worked for Trinkaus and Signal Iduna. „From the Strategic Asset Allocation (SAA), we have made internal quotas that correspond to the asset mix quotas in the Investment Supervision Act“, explains Becker.

The annual report does not reveal many details beyond the broad allocation to segments like stocks, bonds, real estate, and private equity. According to the report, the capital investments increased by about 2.8 billion euros or 8% in 2023. The book value was 37 billion euros, and the fair value was 59.3 billion euros – 10.5% higher than the previous year. The overall capital investments achieved a return of 6.8%.

Since early 2023, Angelika Stein-Homberg, a lawyer and longtime board member, has been leading the VBL as president. Stein-Homberg joined the VBL in 2014 from the Federal Ministry of Finance, where she headed the department for corporate investments. In March 2024, the VBL declined a request for an interview with Börsen-Zeitung, saying "for the VBL, private equity is still a young business area that is just being built. At this time, a press discussion would, in our view, be premature.“

Elsewhere, pension institutions are also being required to disclose their investments. For example, Preqin co-founder Mark O'Hare had already forced US pension funds to disclose information about their investments under the Freedom of Information Act in 2003. This was the foundation for his company's business model, which provides key data on private markets and returns. In 2024, O'Hare sold his company for over 3 billion dollars to asset manager BlackRock. Thus, the court ruling on the VBL could mark the beginning of increased transparency about private markets in Germany.