Swiss pension funds are showing appetite for domestic private equity despite growing scepticism about the asset class.
Swisscanto this week announced the first close of its Private Equity Switzerland Growth (Schweizer Wachstumsfonds) II, securing CHF171.65m in commitments since fundraising began in March – above its CHF150m target.
A spokesperson for Swisscanto told IPE that over 80% of investments – excluding CHF25m in seed money from Zürcher Kantonalbank (ZKB) – come from institutional clients, mainly Swiss pension funds. The investor base also includes funds of funds, asset managers and single-family offices.
Swisscanto expects a final close in the fourth quarter of 2026, with a potential total volume of CHF200–250m.
“This target ensures that we can focus on what we believe to be the right investments and the best opportunities, without being under pressure to invest due to high capital commitments,” the spokesperson said.
The fund will invest mainly in companies headquartered and operating in Switzerland.
Swiss Growth Fund II is the third vehicle in Swisscanto’s private equity programme, alongside Swiss Growth Fund I – which has achieved six exits to date – and the Global Decarbonization Fund. Together, the three funds manage nearly CHF500m.
The track record of Swiss Growth Fund I has supported fundraising for the second growth fund, according to the spokesperson.
Swiss pension funds, which also access private equity via the Swisscanto Investment Foundation, are seeking returns and diversification in the current low interest rate environment.
Home bias
Their concentration in Swiss equities and preference for a home bias – partly for currency reasons – also push some investors towards domestic private equity, viewed as a satellite allocation within a broader global buyout portfolio, the spokesperson added.
However, consultants have noted growing caution among institutional investors.
PPCmetrics observed that while some clients are entering the asset class for the first time, others are reducing its exposure.
“A few years ago, there was a strong tendency for pension funds to increase their allocations to private equity; this is no longer the case today,” said Romano Gruber, team leader for asset manager selection and illiquid assets at PPCmetrics.
He pointed to performance relative to global equities, slow distributions to investors, and a shift in focus towards other illiquid asset classes such as real estate and infrastructure as factors behind the pullback.
“We do not see a trend of Swiss pension funds showing increased interest in domestic private equity. While there is a certain home bias in listed equities, private equity allocations are typically implemented globally,” Gruber added.
Limited product availability, the small number of private equity-owned companies, and the higher concentration and selection risks of single-country strategies also constrain local investment opportunities.
Pension funds tend instead to allocate to venture capital or growth funds, or vehicles targeting established small and medium-sized enterprises in Switzerland, Gruber said.
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