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Swiss ABB scheme launches new venture fund

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SWITZERLAND – The €3.6bn Baden based ABB Vorsorge (ABB) pension fund company has launched its fourth closed-end private equity fund, which has already raised CHF 80m (€54.5m) in its first closing.

The fund, called Private Equity World 3, will have a second closing at the end of January next year.
Since it forms part of the ABB investment foundation, it is open exclusively to Swiss tax-exempt organisations and ABB is targeting Swiss pension funds in particular.

The fund’s investment strategy will eventually consist of 40% North American equities, between 30% and 40% European equities, and the remainder in other regions, including emerging markets.

The investment of the fund will be carried out by Tacoma based Frank Russell Company, who will invest the fund’s assets according to ABB guidelines.

Says Daniel Dubach, chief investment officer at ABB “The philosophy behind the launch is to provide continuous investment opportunities. Since the funds are closed in nature, we aim to launch a new one every 12 to 18 months. The programme began in 1998, and thus far we have achieved that objective. And we see no reason why the programme won’t stay on course, despite recent market difficulties.”

Elsewhere, Dubach says that ABB are about to enter the hedge fund market, with a fund of funds product set for launch next March. This new initiative will also involve a US based adviser, but no other details are yet available. “We haven’t determined the finer points of the hedge fund launch yet, but this is one of the few remaining steps towards achieving our overall objective of providing a product range across all asset classes that attract pension funds,” comments Dubach.

ABB Vorsorge is the pension fund company of power and automation technologies company, ABB Switzerland, and as such takes care of its asset management, administration, accounting and reporting. Though ABB Switzerland is by far its biggest client, ABB Vorsorge does offer these services to third parties, particularly Swiss-based pension funds.

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