The boom in alternatives has been broken by the financial crisis and Swiss investors are placing their money elsewhere, Michael Brandenberger of Swiss consultancy Complementa has suggested. In its latest risk check-up, Complementa said it saw a further increase in allocations to alternatives, continuing a prominent trend of the Swiss pensions market over recent years. But many fund managers have seen major outflows in the first halve of 2009 “and this is not just from retail customers”, Brandenberger pointed out. “Personally, I think pensionskassen will invest less in alternative asset classes,” claimed Brandenberger. When asked whether this was true of all alternative investment categories, Brandenberger predicted it would likely hit hedge funds.
Herbert Brändli, head of the Profond multi-employer fund, said while he thinks private equity could offer “interesting possibilities”, other constructions including derivatives and hedge funds are speculative and therefore not suitable for long-term investors like pension funds. Alfred Bühler, partner at PPCmetrics, also explained at the conference of the Swiss pension fund association ASIP in Zurich that diversification had been less effective in 2008 than during the previous crisis in 2002.