SwissAir pension scheme is undergoing a wholesale reorganisation of its four individual funds which has already included the launch of two institutional umbrella funds. Over the next two months it is searching via www.ipe-quest.com for managers to oversee five further sub funds with assets totalling Sfr1bn (e680m).
A year ago SwissAir’s Sfr13bn scheme was split into four separate funds – one for the pilots, one for ground staff and two for other employees – that decided to pool their investments in an umbrella fund to gain economies of scale.
Last August the four boards gave the go-ahead and even after SwissAir, the sponsor and mother company, went bankrupt in October, the project continued as planned to a 1 January deadline for the launch of an umbrella fund.
By 3 January, the fund had launched two, one covering traditional assets and managed by UBS Fond, the other covering alternative assets and run by Unigestion.
Pension Fund Services, the company created by the four funds to service and administer the scheme, says the fund is the first institutional umbrella launched and registered in Switzerland that is available to other institutional investors.
Under the UBS umbrella there are six sub-funds, all managed externally, including five index trackers and one active Swiss equity mandate. Felix Kottmann, the investment consultant to the fund, says they intend to increase the number of sub-funds to between 13 and 17.
Over the next two months the scheme is seeking managers for five mandates, each with a value of up to Sfr200m. Using www.ipe-quest.com, the fund is looking for managers to run enhanced European and US bonds and active mandates for US, Pacific and European equities.
After they have launched these further funds, all that is missing are global equity and global bond sub funds, two asset classes that may be tackled at a later date. “Basically the idea is to allow any institution to build their own core satellite system. There is no specific Swiss bias,” says Kottmann.
There are three possible outcomes as a consequence of SwissAir’s predicament. Worst case is that all active members leave the company and the scheme turns into a full retirement fund.
The second scenario is half the work force remain with companies that become independent but continue making contributions. In this instance, the fund will retain around Sfr7bn. The best outcome is that Crossair takes over and the fund continues as normal.