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Alternative Market Briefing

Swiss institutions don’t like alternatives anymore and other Swiss news

Wednesday, February 13, 2013

Benedicte Gravrand, Opalesque Geneva -

Swiss institutional investors don’t like alternatives anymore

Apparently, institutional investors’ exposure to funds of hedge funds (FoHF) has decreased by half on average since the crisis.

However, some pension funds did keep an important allocation to FoHF, as for example Credit Suisse’s pension fund. Its 10.4% allocation corresponds to half of the fund’s total exposure to alternatives. The fund is up 7% YTD – but it is an exception to the rule, reports Swiss daily Le Temps. Another exception is found in Zurich City’s pension fund. Due to positive performance, its allocation to hedge funds went from 5.8% in 2008 to 7.9% in 2011 (and 4.6% in private equity and 2.9% in commodities).

UBS’s own pension fund has not had any hedge fund allocation since 2008. That year, it sold its hedge fund investments and replaced them with fixed income. The bank is not currently considering re-investing in hedge funds, but may do so in future, if only for diversification purposes. Swiss railways company CFF’s own pension fund decreased its hedge fund allocation down to 1.5% of the portfolio of late.

Institutional investors cite different reasons for divesting: congruence of returns between passive and active asset classes, high fees, and lack of transparen......................

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