Swiss Institutions Suffered Subdued Investment Returns In 2004

by Carla Johnson, Investors Offshore.com

06 January 2005

According to a report by consulting firm Lusenti Partners, Swiss institutional investors experienced disappointing returns in 2004, particularly on alternative investments.

The survey, sponsored by Credit Suisse Asset Management, questioned 163 institutional investors with total assets of CHF169.2 billion (EUR109 billion, US$145 billion). It found that average returns in 2004 were between 3% and 4%, with the larger institutions faring slightly better than their smaller counterparts.

Indirect real estate investments produced returns of 3.2%, the report observed, while Swiss equities yielded 2.9% and alternative investments, such as hedge funds and private equity, produced a somewhat subdued 1.2% return.

The survey also found that two-thirds of respondents altered their strategic allocation between 2001 and 2004, mostly away from domestic and foreign equities and in favour of indirect real estate investments.

Whilst the report noted that Swiss institutions “remain vulnerable” as a result of lower than expected investment performance, it cautioned against overestimating the number of firms that may be experiencing difficulties.

“It would be wrong to overestimate the number and proportion of institutions that are in severe difficulties and are forced to take corrective measures,” the report stated, adding that 52% of participants did not implement stabilizing measures.

Returns in 2005 are expected to average just over 4%, according to the institutions in the survey.

Recommended