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Impact Investing

IPE special report May 2018

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Nestle fund raises hedge fund allocation

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SWITZERLAND – The 6.2 billion Swiss-franc (3.8 billion-euro) Nestle Fonds de Pension, one of the largest Swiss pension funds, has increased its hedge fund allocation from 15% to 18%.

The fund, which has allocated a total of one billion francs, started investing in hedge funds in 1996. Over the last five years, hedge assets are reported to have grown by 12.2%.

The Vevey-based fund’s hedge specialists are Geneva-based Unigestion, which has been working for the fund since 1997, the Chicago–based Grosvenor Capital Management and Union Bancaire Privee Asset Management, a New York-based subsidiary of the Geneva bank.

In March data released by Watson Wyatt and industry association ASIP, the Association of Swiss Pension Funds, revealed that Swiss pension funds’ returns fell by more than 10% last year.

The fund’s chief executive, Jean-Pierre Steiner, who is also president of ASIP’s investment committee, added that pension funds must cut unnecessary risks posed by too little diversification or too much exposure to equities.

Investment managers should also consider “worst case” scenarios. The ASIP investment committee recommended a long-term, diversified investment strategy, with risk budgets established by asset liability studies.

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