Switzerland’s largest pension fund, Publica, is in talks with large international pension funds for co-investments in infrastructure private equity, chief investment officer Stefan Beiner told IPE.
The Swiss pension fund, with assets under management of CHF44bn (€45.6bn) at the end of 2021, plans to invest in infrastructure private equity with other large international asset owners seeking additional portfolio diversification, the CIO added.
Publica has reviewed its strategic asset allocation in the first half of this year, deliberately foreseeing one scenario among others, based on long-term trends, that takes into account future stagflation.
In June, Publica’s board decided to reduce its fixed income allocation as part of its new strategy for open pension plans – which make up more than 90% of the pension fund’s assets – from 58% to 44%.
Of the 14% reduction in fixed income, 5% was committed to public equity, increasing investments in the asset class from 27% to 32%, with the remaining 9% going to real assets, including 5% in real estate – split 2% in Swiss and 3% in international real estate – 3% in the new asset class infrastructure private equity, and 1% in precious metals (increasing the allocation to 3%), the CIO explained.
Publica’s investment committee has approved the implementation of the new investments.
“Publica is looking to invest one part of the assets in the new asset class through open funds, and another part through co-investments. It will also invest one important part of the assets in sustainable infrastructure,” Beiner said.
The pension fund will not be looking for any additional external asset managers for the new investments in public equities after reviewing its strategic asset allocation.
Additionally, the scheme is now examining how best to implement the new strategy for its real estate investments, both domestically and internationally, Beiner said.