Publica, Switzerland’s largest pension fund, has made its first investment in the new asset class private equity infrastructure in a strategic asset allocation shift.
The scheme was in talks with large international pension funds for co-investments in infrastructure private equity, Stefan Beiner, chief investment officer, told IPE in 2022.
It was aiming to invest in the new asset class through open funds, and co-investments, looking also at sustainable infrastructure, Beiner added.
Publica is pursuing a four-year plan to put the new strategy in place, and last year increased allocations to equities from 28% to almost 32%, cutting investments in emerging market government bonds, and “making initial investments in the new asset class of private infrastructure”, it said reporting its performance for 2023.
Equities pushed up returns last year to 3.85% together with bonds, in contrast with -9.6% net achieved in 2022 with both bonds and equities posting losses.
Last year, equities returned 8.5%, contributing with 2.7 percentage points to the overall performance, the scheme said. Bonds returned 4.1% in 2023, making a positive contribution of 2.1 percentage points to the scheme’s overall return.
The funding ratio across all plans stood at 98.3% last year, up from 96.7% in 2022, as a result of positive returns.
The pension fund has also increased allocations to precious metals gold and silver, which returned almost 5% last year, up from 2% to 3%, as part of its four-year strategic plan, it added.
Publica’s open pension plans, making up the largest share of the pension fund’s assets, and open to beneficiaries and active members, posted a 3.8% return, and closed pension plans, open only to beneficiaries, achieved a 4.7% return, it added.
A lower-risk strategy for the closed plans, with a larger allocation to Swiss investments (60%), led to higher returns, it said. In January, Publica merged its seven closed plans into a single plan, it added.
Investment in Swiss real estate generated just under 2% in returns in 2023, following a slight fall in value, while foreign real estate funds suffered significant losses due to higher interest rates in many industrialised nations, it said.
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