Migros Pensionskasse (MPK), the pension fund for the Swiss retailer, has lost CHF99m (€99.2m) as a result of the decision taken by the financial market supervisory authority FINMA to write down Credit Suisse’s AT1 bonds, Christoph Ryter, the chief executive officer of the pension fund, told IPE.
Ryter added that the scheme has also recorded losses of CHF10m resulting from Credit Suisse’s falling share prices, making total losses for the pension fund of CHF110m from investments in the bank since the beginning of the year.
FINMA wiped off CHF16bn of Credit Suisse AT1 debt based on the emergency ordinance enforced by the Swiss government (Federal Council) to grant extraordinary liquidity assistance loans to the bank on the brink of collapsing.
MPK is examining the possibility of taking legal action for the losses resulting from FINMA’s decision, but it has not yet taken any decision, the CEO said. He added that the takeover of Credit Suisse by UBS will not change the course of the scheme’s investment strategy.
Credit Suisse’s shares fell after the largest shareholder, the Saudi National Bank, excluded the possibility of providing financial assistance to the bank. The chair of the Saudi National Bank, Ammar al-Khudairy, resigned following his comment.
Migros returned -5.6% in the financial year 2022, down from 8.5% the previous year, with assets under management decreasing from CHF29.74bn in 2021 to CHF27.62bn last year, according to its latest financial statement.
The scheme lists AT1bonds, also called CoCo bonds, as an alternative investment alongside loans, hybrid bonds, senior secured loans, and bail-in bonds, according to its financial statement.
Alternative investments totalled CHF3.88bn in 2022, down from CHF4.23bn in 2021, or 14% of total assets, MPK added. The scheme has added bail-in bonds worth CHF198.2m as a new asset class in its alternatives portfolio.
MPK allocates 32.6% of total assets to nominal value investments, 25.2% to equities, 40.2% to real estate and 2% to gold, according to the statement.
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