Founded in 2002 Bosch Pensionsfonds (BPF) was Germany’s first corporate pension fund. As part of the largest outsourcing model in the German occupational pensions landscape, it recruited best-in-class service providers to manage key tasks such as accounting, reporting, administration, communication and fiduciary management. This has allowed Bosch to concentrate on strategy, management and governance.

Until recently, BPF had operated with an almost unchanged functional structure and capacity. However, with increasing complexity and a €6.7bn portfolio that is projected to double in value over the next 10 years, the fund revised its strategy to ensure more sustainable investment success and expand its activities in the highly labour-intensive alternatives asset class. This led to a more flexible approach in terms of breadth and depth to manoeuvre the fund into a future-proof position.

After a thorough examination of all possible avenues, it was decided that the best solution would be to increase the existing organisation’s resilience by adding a third pillar. Under this new governance concept, BPF, its corporate sponsor Bosch and external service providers are now cooperative entities. Further analysis also identified highly demanding activities leading to the creation of a dedicated in-house team for alternative investments, enhanced member services, the convergence of risk management functions and the expansion of BPF’s as a thought leader.

By exploiting the entire repertoire of investments from private equity and infrastructure equity through to private corporate debt and infrastructure bonds as well as real estate, BPF’s alternatives portfolio combines high-return opportunities with relatively low volatility. This has allowed the fund to consistently outperform its expectations and lead the German market. BPF believes that its impressive track record in assigning best-in-class managers is testament to the success of its meticulous manager selection process.