Asga Pensionskasse to make first foray into private debt

Swiss multi-employer pension fund Asga Pensionskasse is planning to make its first foray into private debt, a niche asset class among pension funds in Switzerland, as it reviews its strategic asset allocation.

According to its 2024 financial statement, Asga intends to expand its investment strategy to include private debt, although no allocations will be made before the end of 2026, chief investment officer Frank Wigger told IPE.

He added that the precise allocation and investment amounts will become clear by the end of next year.

Asga – which managed nearly CHF30bn (€32bn) at year‑end 2024 – will phase in the new strategy over the next two years. Under its previous approach, the fund’s assets were already broadly diversified to achieve last year’s return target of 7.02%.

The pension fund has slightly adjusted its strategic targets to reduce equity home bias, while increasing the weighting of Swiss real estate at the expense of foreign property.

Alternatives grew to close to CHF4.5bn in 2024, up from CHF3.5bn in 2023, with senior loans (4.7%), infrastructure (4.1%) and private equity (2.5%) as the main sub‑allocations.

Private debt remains niche

Despite its growing international popularity, private debt accounts for less than 1% of assets at the average Swiss pension fund.

Romano Gruber, team leader for asset manager selection and illiquid assets at consultancy PPCmetrics, said that several factors lead to a low exposure to private debt. 

“[There are] historical reasons: Swiss pension funds have historically had a high allocation to real estate, which accounts for approximately a quarter of their total assets. This already leads to a high exposure to illiquid investments and, depending on the pension fund’s structure and risk tolerance, limits the ability to additionally invest in other illiquid asset categories,” he said.

The asset class’s drawbacks include poor liability‑hedging at variable rates, limited inflation protection in Swiss francs, and risks tied to high borrower leverage, illiquidity, and credit‑selection challenges, Gruber explained.

However, private debt typically offers higher yields than government or corporate bonds, and access to new industries or borrowers, supporting portfolio diversification and accounting‑stable returns, he said.

Compenswiss is among the few large schemes to disclose plans for private debt exposure, underscoring the asset class’s still‑modest penetration in Switzerland.

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