Swiss roundup: OAK on cost transparency, infrastructure PPPs

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  • Swiss roundup: OAK on cost transparency, infrastructure PPPs

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SWITZERLAND – Switzerland's top supervisor (OAK) has drawn fire for its plans to increase cost transparency in Pensionskassens' annual reports.

Earlier this year, Pierre Triponez, president at the OAK, told IPE that increasing cost transparency was "an important topic if we want to bring greater calm to the system".

He also vowed to "find a system that is manageable without too much additional effort and corresponding costs".

The OAK's draft on new legislation for more cost transparency includes the introduction of a special total expense ratio dubbed TER OAK, calculated by dividing the TER by the net invested assets in a pooled vehicle.

Further, Swiss Pensionskassen will have to calculate a cost transparency quote to show which share of their assets is invested in transparent vehicles.

Pensionskassen can also get "alternative calculation models" approved by the OAK.

The draft is open for consultation until 15 January, but has already been criticised by the Swiss industry magazine VPS.

It said the OAK's plans were "regulatory overkill", requiring "major additional effort" on the part of Pensionskassen, but adding "little additional information value".

Meanwhile, Swiss think tank economiesuisse has published a study into public-private partnerships (PPPs) for infrastructure investments.

It noted the mutual benefits for the public sector, as well as institutional investors, searching for long-term, stable returns, but also argued that a "sea change" was needed in Switzerland to get such investments on track.

"Unfortunately in this country, the ideology prevails that the running and financing of infrastructure projects is the sole remit of the state," economiesuisse said.

Various studies recently confirmed a heightened interest among Swiss institutional investors in infrastructure, as prices on the domestic property market continue to climb.

However, analysts agree the interest is not yet visible in actual investments, and one institutional investor even noted that infrastructure was "only something with an insatiable appetite" and not for Pensionskassen with a solid property portfolio.

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