Swiss pension funds will continue to monitor the progress of the merger between Credit Suisse and UBS, its impact on completion, costs and asset classes, opting to follow investment strategies put in place so far.
The investment strategy of Publica, the country’s largest pension fund with CHF39.4bn (€39.7bn), will not change as a result of the recent deal between both banks, it said in a statement.
The pension fund will continue to closely monitor the implementation of the merger, its statement said, adding that for the mandates it holds with the banks it relies on back-up managers that it could activate promptly.
It has recorded low losses from the near collapse of Credit Suisse of 0-0006% of total assets under management, or CHF2.5m, after cutting its exposure to the bank last year, reducing the volume of its securities lending programme to zero, and closing the cash account held with the lender.
Publica has mandates with Credit Suisse for Swiss equities and developed market equities (excluding Switzerland), and with UBS for emerging markets government bonds and Chinese government bonds, according to IPE research.
Compenswiss, another large pension fund with CHF37.2bn in total assets, said in a note that the takeover does not have a direct material impact on the scheme, and all first pillar pensions are secured.
The pension fund will follow developments closely over the coming weeks and months, it added.
According to IPE research, Compenswiss has a mandate with Credit Suisse for UK equities, and another for global equities (Nordic) worth £1.47bn, and with UBS for global real estate, and it also invests £550.66m in UBS’s Providentia Helvetica Fund.
Compensiwss declined to comment on whether the merger will bring about changes with regard to its investment portfolios and strategy.
Multi-employer pension fund Asga Pensionskasse holds Credit Suisse as its global custodian, but is however re-tendering the service with a final decision expected later in the year.
“On the asset management side, the exposure to UBS/Credit Suisse is concentrated on passive equity and real estate mandates. Given the long-term nature of real estate, we are able to assess the impact of the takeover with the required due diligence,” chief investment officer Frank Wigger told IPE.
He added: “In general, of particular interest will be to see whether this takeover will lead to less competition and hence higher costs in the implementation, or whether other competitors will step in and fill the void. The main concern is the domestic real estate funds area, where UBS and Credit Suisse’s combined market share will represent slightly over 50%.”
Christoph Ryter, the chief executive officer of Migros Pensionskasse, told IPE that the deal between the two firms will not change the course of the scheme’s investment strategy.
UBS runs £1.96bn of loans and part of a mortgage (direct investment) portfolio for Migros Pensionskasse, which does not have any mandates with Credit Suisse, IPE research shows.
Pensionskasse Post, the pension fund for employees of the Swiss postal service, said in statement that, after conducting a detailed analysis of the merger, it has decided not to take measures. The pension fund holds UBS as global custodian.
The scheme will continue to monitor “very closely” the completion of the takeover, which could take months or even a year or two, it added. It has a foreign currency bonds (hedged) portfolio with Credit Suisse, but no mandates with UBS.
Among other large Swiss pension funds, the pension fund for Swiss federal railways PK SBB uses Credit Suisse for several portfolios: global government securities, Swiss real estate, global real estate and MSCI Pacific equities. It uses UBS for Swiss real estate.
The pension fund is not planning to adjust its investment strategy as a result of the merger between UBS and Credit Suisse, instead monitoring the situation.
CIO Dominik Irniger told IPE that, however, the concentration in the Swiss market following the merger is problematic, adding: “In asset management, however, it is less tragic, since there are many foreign providers (active) in the (Swiss) market.”
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