CSAM sets up tax-efficient vehicles for schemes
SWITZERLAND - Credit Suisse Asset Management has launched two new tax-efficient investment vehicles for US equities which are exclusively aimed at Swiss pension funds.
The new products allow Swiss pension funds to pool funds and invest in the US stock market without the dividends being taxed at source by the US tax authorities.
In addition, because the new funds are Swiss-domiciled, transactions are exempted from Swiss stamp duty.
They are called Institutional Fund US Index Credit Suisse Institutional Fund US Large Cap Index.
They join the existing umbrella fund Credit Suisse Institutional Fund, containing 13 sub-funds in equity, fixed income, and indirect real estate investments worth a total CHF6.3bn (€4.06bn).
Didier Böckli, deputy head of the 20-strong quantitative team, told IPE that at the moment segregated investments are entitled to tax breaks, but added that this option was only open to big pension funds.
Smaller funds have the chance to invest in the US market via pooled investments, but are “tax-disadvantaged”. But the new pooled funds, which are open to pension funds of all sizes, are effectively treated as segregated from the US fiscal point of view, he said.
The funds were launched last week and have so far attracted “one or two clients” who have invested CHF2m. The capital will soar to about CH200m by June as CSAM transfers pension funds’ funds already invested in the 13 sub-funds.
Böckli, who manages the two new vehicles with head of quantitative team Markus Hübscher, said: “Such vehicles have quite a lot of potential. Many competitors do not offer these products and if we can provide specific solutions for them institutional_investors interest can be high.”
CSAM added that the team currently manages assets of CHF34.4bn in institutional mandates, exchange-traded funds, investment foundations and investment funds.
Earlier this week, Credit Suisse said more new investment flows are going to a small number of fund managers as it becomes more difficult for active managers to outperform.