German Dentists’ Fund Takes Legal Action Against Advisers for €1.1 Billion Loss

A German pension fund, whose venture into private markets resulted in staggering losses amounting to half of its assets, has initiated legal action against its former auditor, an adviser, and its own management team in a bid to recover damages.

The fund, known by its German acronym VZB, is suing Dusseldorf-based Apobank, the German branch of Forvis Mazars in Hamburg, the Berlin city government, and nine former managers, as detailed in a court filing reviewed by Bloomberg News.

VZB, which serves over 10,000 dentists in and around Berlin, has reported losses nearing €1.1 billion ($1.3 billion) after several of its investments, including a shrimp farm, failed to perform. At the end of 2024, the fund had approximately €2.2 billion in assets under management.

This loss exemplifies a broader crisis affecting numerous German pension funds that have invested heavily in opaque and high-risk financial sectors to bolster returns diminished by years of ultra-low interest rates. Many of these strategies have faced significant losses as interest rates have begun to rise.

VZB claims it had engaged Apobank to provide guidance on investment risks, but alleges that the lender breached its responsibilities. The pension fund also accuses Forvis Mazars of issuing “sham opinions” regarding its assets during audits.

Furthermore, VZB is holding the city of Berlin accountable, asserting that the government failed to adequately supervise the fund’s operations as mandated. The fund has requested that a Berlin appeals court allow lawsuits against all 12 defendants to be heard in the German capital.

A spokesperson for the Berlin court declined to comment on the case, which was filed in December. Generally, tribunals only disclose filings once they have been shared with all involved parties, he noted.

Representatives for Forvis Mazars and the Berlin government stated they were unaware of any court filing. Apobank, while unable to comment on client matters, has denied any responsibility for VZB’s losses.

Shrimp Farm

In addition to the shrimp farm, VZB’s investments included debt and equity stakes in hotels, vacation resorts, and startups, such as digital insurer Element Insurance AG.

Insolvencies among companies in which VZB invested resulted in losses of €274 million, while separate write-offs on the top dozen investments amounted to €791 million, according to an internal presentation obtained by Bloomberg.

Approximately one-third of VZB’s assets under management were allocated to direct loans and Schuldschein debt, which the pension fund claims were illegal due to their lack of collateral or creditworthiness.

Lawyers for VZB argue that Forvis Mazars and Apobank, tasked with conducting risk analysis, should have identified potential issues. “Had the auditor conducted even a few random checks on the numerous loans, it would have immediately recognized that the granting of these loans was inadmissible,” VZB’s legal representatives stated in the filing.

According to VZB, Apobank categorized the majority of these loans as investment-grade but failed to independently verify these ratings or assess whether any writedowns were necessary.

An Apobank spokesperson clarified that, as a matter of principle, the bank does not issue ratings or evaluate investments in equity, illiquid, or alternative investments. “If such investments are held by a client in their fixed or free assets, we report the investments, ratings, and prices according to the client’s specifications,” the spokesperson stated in an email to Bloomberg News.

Copyright 2026 Bloomberg.

Topics
Lawsuits
Profit Loss

A German pension fund, whose venture into private markets resulted in staggering losses amounting to half of its assets, has initiated legal action against its former auditor, an adviser, and its own management team in a bid to recover damages.

The fund, known by its German acronym VZB, is suing Dusseldorf-based Apobank, the German branch of Forvis Mazars in Hamburg, the Berlin city government, and nine former managers, as detailed in a court filing reviewed by Bloomberg News.

VZB, which serves over 10,000 dentists in and around Berlin, has reported losses nearing €1.1 billion ($1.3 billion) after several of its investments, including a shrimp farm, failed to perform. At the end of 2024, the fund had approximately €2.2 billion in assets under management.

This loss exemplifies a broader crisis affecting numerous German pension funds that have invested heavily in opaque and high-risk financial sectors to bolster returns diminished by years of ultra-low interest rates. Many of these strategies have faced significant losses as interest rates have begun to rise.

VZB claims it had engaged Apobank to provide guidance on investment risks, but alleges that the lender breached its responsibilities. The pension fund also accuses Forvis Mazars of issuing “sham opinions” regarding its assets during audits.

Furthermore, VZB is holding the city of Berlin accountable, asserting that the government failed to adequately supervise the fund’s operations as mandated. The fund has requested that a Berlin appeals court allow lawsuits against all 12 defendants to be heard in the German capital.

A spokesperson for the Berlin court declined to comment on the case, which was filed in December. Generally, tribunals only disclose filings once they have been shared with all involved parties, he noted.

Representatives for Forvis Mazars and the Berlin government stated they were unaware of any court filing. Apobank, while unable to comment on client matters, has denied any responsibility for VZB’s losses.

Shrimp Farm

In addition to the shrimp farm, VZB’s investments included debt and equity stakes in hotels, vacation resorts, and startups, such as digital insurer Element Insurance AG.

Insolvencies among companies in which VZB invested resulted in losses of €274 million, while separate write-offs on the top dozen investments amounted to €791 million, according to an internal presentation obtained by Bloomberg.

Approximately one-third of VZB’s assets under management were allocated to direct loans and Schuldschein debt, which the pension fund claims were illegal due to their lack of collateral or creditworthiness.

Lawyers for VZB argue that Forvis Mazars and Apobank, tasked with conducting risk analysis, should have identified potential issues. “Had the auditor conducted even a few random checks on the numerous loans, it would have immediately recognized that the granting of these loans was inadmissible,” VZB’s legal representatives stated in the filing.

According to VZB, Apobank categorized the majority of these loans as investment-grade but failed to independently verify these ratings or assess whether any writedowns were necessary.

An Apobank spokesperson clarified that, as a matter of principle, the bank does not issue ratings or evaluate investments in equity, illiquid, or alternative investments. “If such investments are held by a client in their fixed or free assets, we report the investments, ratings, and prices according to the client’s specifications,” the spokesperson stated in an email to Bloomberg News.

Copyright 2026 Bloomberg.

Topics
Lawsuits
Profit Loss