Lombard Odier has signed a partnership agreement with PensExpert, a provider of customised pension solutions in Switzerland and Germany.

The cooperation evolves around vested benefits and funds of Pensionskassen that can be transferred to PensExpert. Lombard Odier’s investment team will manage the funds. PensExpert has five pension funds catering for over 12,000 insured individuals.

Andreas Arni, head of Swiss domestic market at Lombard Odier, said: “With this partnership, we can complete our range of pension products in German and French-speaking Switzerland.”

PK SBB posts negative returns

PK SBB – the pension fund for Swiss federal railways – returned -12.1% on investments last year. Its funding level declined from 112.4% to 100.6%.

Falling bond prices negatively impacted the pension fund holding a high share of bonds in its portfolio.

The board of trustees adjusted the fund’s technical interest rate from 1% to 1.5%, with a positive effect on its funding ratio. It has applied the minimum interest rate of 1% on assets saved by members.

In order to further expand the technology location and venture capital financing in Germany, the federal government is providing additional funds. These should primarily serve as growth capital.

Stiftung Auffangeinrichtung could continue investing interest-free

The Swiss Federal Council has asked parliament to allow the occupational pension scheme Stiftung Auffangeinrichtung BVG, or Foundation Institution Suppletive LPP, to invest in a non-interest bearing account at the Federal Treasury for a further four years.

The Swiss parliament already gave the go-ahead in 2020 to invest a maximum of CHF10bn (€9.9bn) interest-free with the Federal Treasury for a period of three years, with its funding ratio falling below 105%.

The scheme’s funding ratio deteriorated to 104.6% at the end of April last year, to 102.6% by mid-last year and reached 102.3% at the end of November. Losses in financial markets and higher interest rates led to a lower funding ratio which has further worsened the scheme’s financial situation.

The fund has decided to place with the Federal Treasury CHF3bn in May, approximately CHF1.25bn in June, and weekly tranches of CHF200m from September to refinance its outflows regularly.

BVG invests a significant part of its assets (61%) in a way that is close to liquidity, 25% is invested in bonds, 9.3% in equities, and 4.2% in real estate. It has been impacted by negative interest rates and volatility in financial markets, it said.

At the end of 2021, BVG counted 1.34 million members, managing vested benefits of around CHF15.6bn. In 2020 it received CHF1.62bn in vested benefits and CHF1.25bn in 2021, plus CHF8.4bn in total in the period 2015-2021. It managed assets in the form of vested benefits worth CHF16.65bn at the end of August last year.

The fund, which is backed by social partners, is required to accept vested benefits from people who are no longer members of a pension scheme, and it has to guarantee the amount of members’ funds.

Germany launches DeepTech & Climate Fund

The German Ministry of Economics and Climate Action and the Ministry of Finance have set up the DeepTech & Climate Fund (DTCF) to provide venture capital financing.

Elisabeth Schrey has been appointed as managing director of the fund, and, together with Tobias Faupel, she is responsible for investments.

The DTCF has up to €1bn to invest in the growth of companies focusing on deep-tech and climate-tech, supporting the transformation of the economy towards net zero. The funds come from the government’s future fund (Zukunftsfonds), and the European Recovery Programme (ERP) special fund.

The DTCF wants to support the growth of companies developing new technology in the long-term as co-investor and partner of institutional investors.

The fund invests in the field of deep tech, for example industry 4.0, robotics, artificial intelligence, quantum computing, process automation and in companies with a technology-based business model digital health, new energy, smart city, and biotech.

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