Swiss pension funds are showing renewed caution toward private equity allocations.

WTW Switzerland has observed that pension funds are either reluctant to further increase investments in the asset class or are gradually reducing their exposure – a process that can take several years.

Private equity now represents only a small run-off portfolio for Migros Pensionskasse, the CHF29.5bn (€32bn) pension fund of the Swiss retailer.

Underperformance compared with listed equities, limited transparency, restricted access for mid-sized funds, and high costs are among the factors prompting hesitation.

Despite these headwinds, private markets remain an important pillar in the asset allocation of pension funds across the DACH region.

The €65bn German supplementary pension fund for the public sector, Versorgungsanstalt des Bundes und der Länder (VBL), has appointed Allianz Global Investors and BlackRock-owned Global Infrastructure Partners (GIP) to invest in European infrastructure project debt.

VBL’s target allocation to infrastructure equity and corporate private equity is set to grow in the coming years.

Bosch logo building

Bosch Pensionsfonds has, in recent years, built a balanced exposure across private equity, infrastructure equity and private debt, and intends to continue this approach

Bosch Pensionsfonds also plans to gradually lift its private markets exposure from 21% to 24% of total assets. The fund will continue to build a balanced portfolio spanning infrastructure equity, private debt and private equity.

Siemens Fonds Invest (SFI), the asset manager for Siemens’ pension assets, intends to leverage its private equity expertise to pool capital from corporates and other asset managers.

Meanwhile, German corporates are increasingly seeking to transfer pension liabilities through buyout transactions. Asset managers are looking to capitalise on this trend by investing assets transferred to Pensionsfonds – the vehicles typically used in Germany for such transactions.

Schroders is strengthening its position in the fast-growing market, working with Pensionsfonds both on specific asset classes and via OCIO mandates.

Items to note:

Luigi Serenelli

IPE DACH Correspondent

This news briefing was published earlier in the week. If you would like to receive it regularly, on your IPE profile, go to My Newsletters and select any from the list.

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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