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Ist-Investmentstiftung cuts domestic bonds

SWITZERLAND - Ist-Investmentstiftung, a major Swiss pension fund with CHF8.3bn (€5.2bn) in assets, has slightly increased exposure to equities and foreign real estate while cutting exposure to domestic bonds.
 
Disclosing its investment strategy for the fourth quarter, Ist-Investmentstiftung said it had allocated 0.5% more to both Swiss and foreign equities amid continued buoyancy of those markets.

Ist-Investmentstiftung now has 15.5% of assets invested in Swiss equities and 10.5% in foreign ones - including 4% in the US, 4% in Europe, 2% in the Pacific Rim and 0.5% in emerging markets.

On the fixed income side, Ist-Investmentstiftung said it had cut exposure to Swiss franc-denominated bonds to 47% from 50% while maintaining a 10% exposure to bonds denominated in foreign currency.

The fund also said it had allocated 0.5% to European real estate while keeping its exposure to Swiss real estate unchanged. As a result, it has 12.5% of assets invested in Swiss real estate and 3% in European real estate.

Zurich-based Ist-Investmentstiftung serves 845 employers, with those from the public sector accounting for around one-third of that number.

Last August, the fund became embroiled in the Swissfirst affair after it emerged that it had dumped shares in Swissfirst just before a merger with another bank in September 2005.

The scheme is being investigated by Swiss authorities to ascertain whether it was part of an insider trading scandal. Ist-Investmentstiftung also directed auditor Ernst & Young to conduct a separate investigation of its Swissfirst investments.

Having completed its probe, Ernst & Young found no evidence to support any wrongdoing on the scheme's part. The sale of Swissfirst shares was "completely understandable", it said.

The auditor stressed that Ist-Investmentstiftung had no prior knowledge of Swissfirst's plans to merge, but instead was only informed of a capital hike by Thomas Matter, Swissfirst's former chief executive. Matter is at the heart of the investigation into a possible insider trading scam.
 
"The portfolio manager at the fund rightly feared that the worth of his Swissfirst holdings would diminish amid the capital hike," Ernst & Young said, adding that the manager also felt that Swissfirst's shares were overvalued vis-à-vis other banks.

Yet following news of Swissfirst's merger with peer Bellevue on September 12, its shares surged 28%. 

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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