CERN, the pension fund for the European Organization for Nuclear Research in Switzerland, returned -1.10%, net of external management and custody fees, last year, according to its 2023 financial statement. The result clashes with the average net return of Swiss schemes last year.
Swiss pension funds achieved average net returns of 5.1% in 2023, with allocations to bonds and equities increasing again, according to the Schweizer Pensionskassenstudie 2024, a study published by Swisscanto.
Average returns for the best-performing schemes was 8.2%, while the worst-performing schemes achieved 2.3% net returns, it added.
CERN pension fund remained under-exposed to bonds and equities last year, against the target set by its strategic asset allocation (SAA). Of its total assets of CHF4.46bn (€4.6bn), it allocated 21.06% to fixed income (against 26.50% set in its SAA), and 15.58% to equities (against 17% set in its SAA), according to the statement.
It also invested 17.77% of its assets in real estate, 1.85% in infrastructure, 2.34% in timberland/farmland, 11.2% in private equity, 13.91% in hedge funds, 12.45% in cash/overlay, and 3.55% in precious metals/commodities.
The negative returns on its real estate investments, at -18.71% after currency hedging costs, had an impact on the scheme’s investment performance, reflecting a decrease in the annual valuations of directly held properties, accounting for 92% of its portfolio, compared with the level at the end of 2022, the scheme said.
Changes in the valuation method adopted by property agents in France and Switzerland also affected returns, it added.
The pension fund’s private equity portfolio returned -1.85% after currency-hedging costs, with a negative performance across different strategies offsetting positive returns from growth funds, the statement showed.
Last year, the scheme committed approximately CHF66m to private equity strategies, with a portfolio including 91 active funds, and involving 48 managers.
Investment in infrastructure funds returned 0.79%, with mature vintage funds generating positive performances in local currency but less so in Swiss francs, given hedging costs, while a vintage fund is still deploying capital, impacting the performance of both local currency and, in particular, Swiss francs, it added.
The scheme largely liquidated an OECD core infrastructure fund, with mixed results in US dollars and even less positive results in Swiss francs.
CERN’s fixed-income portfolio returned 2.74% last year, with the equity portfolio returning 11.82%, it added.
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