Profond goes international
Impressum: Barbara Ottawa, Investment & Pensions Europe (IPE) magazine, 15 September 2008
The Euvidea pension fund is the third to be set up in Liechtenstein under the EU pension fund directive IORP, which is also applicable to EEA member states such as small principality lodged between Switzerland and Austria.
The other two funds are German insurer's LV1871 Pensionsfonds set up in February 2007 and the Rofenberg foundation for retirement provision, an AXA Winterthur subsidiary which received its license at the end of last year.
“We are targetting international companies as well as local companies in various European countries which are still holding their pension liabilities on the balance sheet or those which are aiming to set up an occupational retirement provision,” said Herbert Brändli, head of Euvidea who also chairs the CHF 2.5bn (€1.5bn) Profond.
He confirmed companies in Germany and Austria were among the main targets.
Brändli pointed out the law in Switzerland allowed pension funds to deal more flexibly with underfunding than, for example, in Germany where every year has to be ended with positive results.
“This way the strategic asset allocation can be geared towards more long-term aims, which means returns of up to 3% or 4% higher than in insurance based systems can be expected,” Brändli noted.
He pointed out no contracts have yet been signed with clients but stressed Euvidea was talking to companies which are already members of the Swiss fund Profond.
This fund made the news recently because it divested completely from troubled Swiss bank UBS. (See earlier IPE story: Rights issue protagonist quits UBS)
Brändli noted despite recently-announced structural changes to the bank, the fund will not re-invest “at the moment”.
“We doubt that there is enough quality in the UBS management and we want to know how much the further write-downs are”, he explained.
He added Profond is still expecting UBS to sell off its investment banking business to “concentrate on its core competences” asset managment and private banking.
But when UBS recently announced the structural changes the bank noted it had no intention to sell off any of the business sectors. (See earlier IPE article: UBS moves for a three-way split).
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