Bayer Pensionskasse Schweiz, the pension fund of the German pharmaceutical and agriculture company in Switzerland, has decided to realign its investment strategy, increasing allocations to bonds, and cutting exposure to real estate, it said.
According to the new strategy, its allocation to bonds increased from 8% to 13%, while its exposure to mortgages fell from 10% to 8%, and investments in real estate from 30% to 28%, the scheme said. Equity investments remain unchanged at 40%.
The pension scheme adjusted its investment strategy this year following an asset/liability management study conducted by consultancy C-alm last summer, it said. The purpose of the study is to optimally align its investment strategy with its long-term obligations, it stated.
The fund is over-invested in bonds, with 19% of its total assets allocated to the asset class, which are worth CHF747m (€777m), whereas it has invested 9% of total assets under management in mortgages, 25% in real estate, and 41% in equities, as of end of 2023, it said.
Around 60% of the scheme’s assets are invested in passively managed investment vehicles by Swisscanto, according to Bayer’s latest financial statement.
Swisscanto is the scheme’s manager for bonds and equities, while Bayer uses UBS, Swiss Life, Credit Suisse, Zürich, Helvetia, Swiss Prime, Mobiliar Asset Management, and AXA Investment Managers for indirect real estate investments via foundations or funds, it added in the statement.
Last year, the Swiss Bayer scheme posted returns of 4.8%, with equities, especially world equities, performing well, it disclosed.
Swiss bonds also made a significant contribution to the positive result, with interest rate cuts in Switzerland leading to an increase in the value of its bond portfolio.
The scheme ended 2023 with a funding ratio of 114%, applying an interest rate on pension assets saved by members of 1.5%, it said.
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