German companies explore pension asset pooling to expand private markets access

German companies are increasingly considering pooling defined benefit (DB) and defined contribution (DC) pension assets to improve access to private markets, although differing investment objectives could limit the potential cost savings, according to a report by IPE.

The proposals are gaining traction among larger corporates managing established DB schemes alongside growing DC plans, with combined investment structures offering greater scale, lower management fees and improved access to private equity, infrastructure and private debt.

Christoph Schaumlöffel, senior director of investments at WTW, reportedly told IPE that pooling could improve governance and efficiency while offsetting differing cash-flow profiles as DB schemes mature and DC assets expand.

Marsh has also identified asset pooling as an emerging trend in Germany, with investment structures such as Spezialfonds allowing companies to combine assets to fund growth-oriented investments.

However, WTW reportedly warned that potential savings may be overstated. DB schemes prioritise liability matching and predictable cash flows, while DC plans focus on long-term growth and gradual de-risking ahead of retirement.

Pooling remains relatively uncommon. Lufthansa maintains separate DB and DC investments, with only its DB portfolio allocating to private equity and infrastructure equity. Bosch Pensionsfonds, meanwhile, invests in private equity, infrastructure and private debt through Luxembourg-based structures.

Interest is particularly strong in infrastructure and private debt, while evergreen funds and European long-term investment funds (ELTIFs) are gaining traction as potential routes into private markets for DC investors.