SWITZERLAND - The CHF11bn Versicherungskasse der Stadt Zurich (VSZ) is to soften its exposure to Swiss fixed-income as part of a review of the entire fund.
As reported exclusively by IPN earlier this year, the fund announced that it was looking to increase its then CHF2.4bn non-Swiss portfolio but would not specify an amount.
But it now seems likely that some of the assets will be transferred from the Swiss fixed-income portfolio - currently 45% of the total fund. Global bonds - at 5% - are likely to remain unchanged. Vera Kupper Staub, deputy chief investment officer at the civic pension fund also said that the study will look to introduce currency hedging into its fixed-income strategy.
Seeking new managers for the hedge fund brief also appears to be off the agenda. Kupper Staub added that the fund is still looking to up its hedge fund allocation but would not disclose an amount, despite estimates of up to CHF500m being touted. But the fund “will probably not” seek additional managers for the hedge funds brief since the VSZ already has six fund of fund managers in place, she said.
Back in January the fund initiated an asset liability modelling study, with the full results aimed for year-end.
VSZ is still aiming to increase its private equity allocation and is already looking at global firms to include in its private equity portfolio with the aid of Zurich-based consultant Strategic Capital Management - since ‘there are not many Swiss firms doing private equity,” said Kupper Staub.
Other changes expected to the asset reshuffling include the fund adding timberland to its private equity and real estate portfolios. Kupper Staub said it is also likely that private equity would retain both a fund of funds and a direct investment strategy.
Kupper Staub added that depending on the size of the new mandates and the fund’s past experience with existing managers, there would “certainly” be tenders in more than one area.
The board will meet mid-December and at the beginning of January 2002 before any firm decision as announced.
ECOFIN Consulting and incumbent actuary Olivier Deprez are advising.
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