Credit Suisse Pensionskasse has reviewed its strategic investment guidelines following the emergency takeover of the bank by UBS in March last year.

Fundamental assumptions relating to its investment policy have changed, with the pension fund addressing the issue by comprehensively reviewing its guidelines, the scheme said in its financial statement for 2023.

The scheme took relevant decisions for its investment portfolio, implementing them promptly, based on the available information, it added. Among other things, its bonds allocation was increased, and the duration was extended, it added.

Credit Suisse Pensionkasse faced an “extremely challenging year” for tactical allocations in 2023, that reflected not only in the “monthly tactics meetings” that were held, but also in the mixed performance of its active mandates.

Some of the positive effects of delayed pricing for private market investments last year turned negative this year, and had a significant impact on teh fund’s results. Without this effect, its investment portfolio slightly outperformed its benchmark, returning 5%, according to the report.

All asset classes contributed to the positive performance. Above all, equity – including private equity – recorded the highest returns (9.0%), followed by credit (5%), fixed income (4.7%), infrastructure (4.0%), and real estate (3.4%), it added.

The scheme’s funding ratio stood at 124% last year, compared with 128.7% in 2022, with disposable funds amounting to CHF824.4m (€863m) (previous year CHF1.42bn) and unrestricted risk capacity.

According to the effective asset allocation, taking also into account derivative financial instruments, the Pensionskasse invests 47.4% of its total assets (CHF17.3bn) in fixed income and credits, 46.5% in real assets, and 2.7% is allocated to cash.

The fund’s strategic asset allocation sees 50.5% of total assets invested in cash, rates and credits, 46.6% in real assets, 1.1% in active strategies, and 1.1% in transition assets, meaning investments not considered part of the strategy.

Asset management costs amounted to CHF196.2m last year, which were stable compared with 2022; private equity carried the highest fees with CHF150.2m, it added.

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