Swiss Pension Funds Consider Private Debt
Some Swiss pension funds are exploring private debt to boost returns amid persistently low yields on domestic bonds.
Romano Gruber, team leader for asset manager selection and illiquid assets at PPCmetrics, notes that interest among Swiss pension funds is "currently not immense", but some are considering allocations.
The persistence of low interest rates on Swiss bonds increases the pressure to tap into new sources of return.
According to Gruber, demand for private debt could rise again as it did during the previous low-rate phase between 2015 and 2021. Currently, PPCmetrics is observing a stronger interest in real estate investments from pension funds.
Author's summary: Swiss pension funds seek alternative investments.
- Low yields on domestic bonds drive the search for new returns.
- Private debt is being considered as a potential source of returns.
- Real estate investments are currently more popular among pension funds.