SWITZERLAND - Credit Suisse reduced the equity exposure in its Pensionskasse by 10 percentage points in September and October, but officials have indicated they may hike the fund's equity holding again soon.
The equity quota of the CHF11bn (€7.3bn) Swiss banking group pension fund had been reduced in the crisis to 10.9% by the end of 2008, but had rebounded to 27% by the beginning of September 2009.
Officials then moved to sell some of the pension fund's equity holdings so the equity quota stood at 16.3% by the end of October, which is slightly lower than the pre-crisis level of 18.7% in equities held at the end of 2007.
That said, the bank noted in a statement that it may review this move as "short-term interest rates will stay low for some time to come" judging by the signals from central banks, and "institutional investors with complex benefit obligations are increasingly being pushed into more risky investment categories."
Money from the sale of equities was shifted into corporate bonds, and placed mainly in Swiss franc-denominated high-quality bonds.
The fund's bond exposure was thus increased to 44.6% by the end of October, from 40.1% at the end of 2008 and 32% by the end of 2007.
Credit Suisse also said its private equity investments had "performed very well in October", increasing in value by 8.4%.
The overall exposure to alternatives for the fund, which has an absolute return strategy, was 17% as it achieved 12.5% from hedge funds, 2.8% in private equity, 0.9% in infrastructure and 0.8% in commodities.
Direct real estate - which made up 8.3% of the portfolio - has so far contributed 3.6% to the year-to-date performance of 6.8%, although there is no break down to show what the return had been in the third quarter of this year.
The fund lost 8.5% on its real estate holdings last year, despite a positive 5.2% performance on its directly-held real estate portfolio, invested mainly in housing.
The remainder of the fund was 11% invested in money-market instruments and 2% in indirect real estate.
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