IPE DACH Briefing: Swiss pension funds step up private markets allocations | Analysis

Swiss pension funds are increasing allocations to private equity and private debt, despite lingering caution towards alternative assets.

Siemens Pensionskasse is moving into direct lending to broaden its investment universe to small and medium-sized enterprises and capture the illiquidity premium over senior loans.

Meanwhile, multi-employer scheme Asga Pensionskasse is also expanding alternative investments, with an initial allocation to private debt planned this year.

Swiss pension funds accounted for more than 90% of commitments secured between the first and second close of Swisscanto’s private equity Growth Fund II.

The allocations suggest private equity and private debt continue to attract pension funds that had previously approached private markets cautiously, amid concerns over underperformance versus public markets and defaults in private credit.

Recent geopolitical tensions have also highlighted the liquidity benefits of gold holdings, with pension funds selling positions to realise profits rather than holding them purely as portfolio protection.

In Germany, multi-employer scheme Babcock Pensionskasse is adopting a more defensive investment strategy, focusing primarily on euro-denominated fixed income and excluding equities to meet solvency capital requirements.

Meanwhile, the dental pension scheme Versorgungswerk der Zahnärztekammer Berlin (VZB) continues to face legal disputes.

In Austria, proposed occupational pension reforms could unlock the transfer of €17.7bn in assets from provident funds to pension funds. The reform aims to encourage provident funds, which manage €22.5bn in assets, to move away from defensive investment approaches. Dedicated pension investment pools (Vorsorge-Veranlagungsgemeinschaften) would be established to invest for the long term without capital guarantees in pursuit of higher returns.

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Luigi Serenelli

DACH Correspondent