Asset managers and banks are trying to enter the Swiss pension fund asset management market as pension schemes look to diversify their services while contraction picks up following the recent acquisition of Credit Suisse by UBS.
“We see that more and more banks and asset managers are trying to operate in the Swiss pensions market, for Pensionskassen. This development is very welcome. From the perspective of pension funds, competition is always an advantage,” Stephan Skaanes, partner at consultancy PPCmetrics, told IPE.
The Swiss bank of the canton of Grisons, Graubündner Kantonalbank, has recently split its institutional business from its private banking division to create an independent unit to specifically assist Pensionskassen, insurance companies and foundations.
Graubündner Kantonalbank is one of the institutions publicly announcing a move into the institutional asset management space aiming to break the market concentration particularly in asset management and global custody services away from the newly-formed UBS.
The bank appointed Jon Fadri Pitsch as head of the new institutional division, who joined in September from Credit Suisse, where he served as deputy head for the Eastern region in Switzerland.
Pitsch brings years of knowledge and experience in advising institutional clients on strategy, asset management, global custody and liquidity management, the bank said in a statement.
Françoise Bruderer Thom, chief executive officer of Pensionskasse Post, the scheme for employees of the national postal service Swiss Post, told IPE that one of the aspects to watch going forward is whether smaller banks enter the global custody business, or prepare themselves to serve large pension funds.
Asset manager Swiss Life is already planning to offer its own equity and fixed income index funds to pension funds and other institutional investors from the first quarter of 2024 – a move responding to the sharp rise in demand for passive investment solutions, it announced.
Stephan Elmenhorst, former head of equity portfolio management for index solutions at Credit Suisse Asset Management, will lead the index solution team at Swiss Life from January, it added.
Raising concerns
Pension funds have raised concerns over the risks resulting from the concentration in global custody and asset management after the merger of the two banks earlier this year, with some that have started to re-tender mandates and others to potentially follow.
UBS and Credit Suisse managed €403.8bn of institutional assets, which accounts for 32.9% of Switzerland’s total €1.22trn, according to IPE Top 500 Asset Managers 2023 survey.
“Following the merger of UBS and Credit Suisse, institutional clients are looking for diversification opportunities for their investments and other specialised services such as global custody. This opens up opportunities for growth for all competitors,” Zürcher Kantonalbank (ZKB) said in statement.
Alfredo Fusetti, another partner at PPCmetrics, added: “Consultants will make sure that each provider is given a fair chance in the market. Long-term success factors will include the provision of professional and cost-effective products for pension funds. This often requires significant investments in people, processes and products.”
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