Why Swiss investors should include Private Markets in their portfolios
Newsletter Review | March 2025
Private Equity: Go beyond Swiss borders
Swiss portfolios often reflect a strong home bias, with significant allocations to local stocks, particularly in healthcare and consumer staples. While these sectors provide stability, theya lso limit exposure to global innovation.
Private Equity can help Swiss investors:
- Access a broader set of industries and fast-growing sectors
- Capture opportunities among nearly 11’000 PE-backed firms
- Reduce concentration risk in traditional Swiss equity holdings
Private Debt: Enhance income potential
In a low-yield Swiss bond environment, Private Debt stands out as an attractive alternative source of income. With yields of around 10% as of early 2025 and attractive spreads over US leveraged loans and high-yield bonds, Private Debt offers compelling return potential beyond most Swiss and global public fixed income alternatives.
Beyond their risk-adjusted historical overperformance over public alternatives, Private Debt also aims to mitigate investment risks. Private Debt investments of top-tier fund managers typically focus on safe, reliable characteristics as part of their investment strategies:
- Senior and upper middle market loans
- Sponsor-backed structures with stronger risk-return profiles
- Sectors with lower cyclical sensitivity, offering resilience amid macroeconomic uncertainty
Private Infrastructure: Stabilize your portfolio
Private Infrastructure can serve as a stabilizing factor in Swiss portfolios. Infrastructure assets are particularly sought after due to their ability to deliver robust returns, facilitate diversification, and mitigate inflation risks.
Advantages of Private Infrastructure investments include:
- Inflation-linked cash flows due to inflation-referenced contracts
- Low correlation with traditional markets, mitigating portfolio volatility
- Steady returns: Infrastructure-linked assets delivered 8.8% in the 12 months to mid-2024
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