Switzerland’s public sector pension fund Publica is preparing to allocate up to $1.1bn into private credit, signalling continued institutional demand for higher-yielding alternatives to traditional fixed income, according to a report by Bloomberg citing unnamed people familiar with the matter.
The fund is understood to be seeking external managers for two separate direct lending mandates: one focused on Europe worth up to €500m ($580m), and another targeting the US market at up to $550m. The allocations would expand Publica’s exposure to mid-market direct lending strategies, with around 3% of its strategic portfolio earmarked for the asset class.
The move marks a notable step for one of Switzerland’s largest pension schemes, which oversees roughly CHF44.9bn ($57.2bn) in retirement assets. While traditionally conservative, the fund is seeking to enhance long-term returns without increasing equity risk, reflecting broader pressures facing pension systems in ageing developed economies.
Swiss institutional investors collectively manage more than CHF1.2tn in retirement assets, with alternative investments still relatively modest at under 7% of allocations, despite a regulatory ceiling of 15%. Real estate remains the dominant non-equity exposure.
