SWITZERLAND - The Swiss public pension fund Publica is looking for specialists in euro-denominated corporate bonds as part of a restructuring of its fixed-income portfolio.
The CHF33.3bn (€26bn) fund for federal civil servants is currently separating its CHF19bn mixed bond portfolio into government and corporate bonds.
Susanne Haury von Siebenthal, head of asset management at Publica, told IPE: "We have awarded a mandate each for dollar-denominated corporate bonds to Pimco and BlackRock."
She said negotiations were underway with a specialist for euro-denominated corporate bonds, adding: "We will be searching for another partner to manage euro-denominated corporate bonds."
Haury von Siebenthal said it was not the first time the fund had invested in corporate bonds, but it was the first time it had hired specialists to manage separate mandates.
Last year, the fund awarded two passive mandates for emerging market equities to Vanguard and Pictet that in total will amount to 5% of the total assets under management once they are fully invested at the end of this month.
The 5% strategic allocation of emerging market equities, as well as the 12% allocation of corporate bonds, will be applied to open schemes within Publica, which is a collective pension fund.
In January, the fund implemented separate investment strategies for open and closed schemes under its roof to optimise risk/return profiles.
According to the new strategic asset allocations (SAAs), closed funds without any new members will be invested 68% in bonds denominated in Swiss francs, 2% in cash, 10% in equities and 20% in real estate.
The SAA for open funds contains more asset classes and sub-classes, with 58% in various fixed income vehicles, 29% in equities, 5% in commodities and 8% in real estate.
For 2010, the fund reported a 5.2% return and an increase of its funding level from 102.4% to 104.5%.
According to its preliminary 2010 report, Publica has taken on eight new managers for direct Swiss real estate investments.
But Haury von Siebenthal explained the apparent hires were simply the product of assets Publica acquired last year.
Over the last year, the fund's real estate portfolio grew from CHF2.05bn to CHF2.2bn.