GERMANY – The German technology multinational Bosch is close to achieving its 10% strategic asset allocation to alternatives for its Pensionsfonds.
The alternatives portfolio will be made up of equal allocations to absolute return, commodities, private equity, infrastructure and real estate. (See earlier IPE article: Bosch Pensionsfonds eyes alternatives)
The commodities allocation is now fully invested and half of the investments in private equity have been made, Bernhard Wiesner, CEO of the Bosch Pensionsfonds AG, confirmed to IPE.
In addition, three-quarters of the investments in absolute return strategies have been realised.
"The rest will follow in due course," said Wiesner, who did not disclose the names of the managers involved.
The strategic asset allocation for the €1bn Pensionsfonds is based on a life-cycle model in which only the 10% alternatives bandwidth stays constant for all members.
For active members 48% is invested in fixed income and 42% in equities alongside the 10% alternatives allocation - while for most retired members the fund is switched to a target allocation of 70% fixed income, 20% equities and 10% alternatives.
In 2009 these asset allocations returned 21.6% for active members, 16.3% for those closer to retirement and whose equity exposure is gradually reduced.
Retired members in the insurance-based scheme saw their portfolio return 4.7% while those in the non-insurance based scheme saw a 14.3% return.
"From this lifecycle-concept in combination with defined contribution-components we have gained a risk bearing capacity which allows us to stay on course in the long-term, that means we will also keep up our equity exposure in the long-term and we do not intend to change that," Wiesner pointed out.