The CHF33bn (€36bn) Swiss multi-employer pension fund Asga Pensionskasse is increasing its allocation to alternatives to strengthen diversification and capture emerging investment opportunities.
The pension fund said in a statement that its new investment strategy, now being implemented, will slightly increase exposure to illiquid assets such as Swiss real estate and infrastructure, while reducing holdings of Swiss franc-denominated bonds.
The build-up of illiquid asset classes will be gradual, with the aim of achieving an optimal risk-return profile.
“The primary motivation for the higher allocation to illiquid assets is the further diversification of our investment strategy and to capitalise on various investment opportunities going forward,” the pension fund added in the statement.
Asga’s move to scale back bond investments reflects a broader trend among Swiss schemes shifting away from fixed income towards equities and private markets.
Persistently low yields on Swiss bonds have increased pressure to seek alternative sources of return.
Under the new strategy, Asga has aligned its equity allocation with its strategic target. Equities are set to account for 31.5% of total assets under management, according to its 2025 strategy.
Further strategic adjustments are planned this year, particularly regarding the introduction of private debt as a new asset class.
The investment committee also adopted a revised approach to Swiss real estate last year.
The asset allocation team will seek to enhance growth and returns through direct real estate holdings, with a focus on new construction and renovation projects.
Hedging and domestic equities drive returns
Last year, Asga recorded a return of 6.10%, supported by the outperformance of domestic equities.
Swiss equities returned 17.27%, outperforming foreign equities at 7.51%, driven by strong share price gains from Roche, Novartis, UBS and Holcim, according to the 2025 financial statement.
Asga hedges the majority of its foreign currency exposure across asset classes, an approach that contributed to a return of 6.82% last year. The pension fund said this demonstrates that currency hedging supports both risk management and returns.
Private equity and infrastructure investments posted negative returns, primarily due to currency losses.
While private equity continues to feel the after-effects of the 2021 market peak, infrastructure fulfilled its role as a portfolio stabiliser, according to the pension fund.
