Julius Baer reports a €64m pensions hole

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SWITZERLAND – Swiss private bank Julius Baer has disclosed a CHF100m (€64m) deficit in its group pension schemes.

According to the bank’s financial report for 2005, Julius Baer’s pension assets total CHF1.47bn compared with pension liabilities of CHF1.57bn.

Breaking down the pension assets, executive director of human resources Hermann Wehrli, said €840m came from Julius Baer plans, while the remainder came from the assets at four wealth management firms acquired in December.
Julius Baer paid CHF5.6bn for the four, one of which was GAM, a hedge fund specialist with $54bn (€45bn) in assets.

“The assets in Switzerland are invested according to Swiss pension laws,“ said Wehrli. „The investment strategy of the plans in Switzerland is approximately 15% in equity, 50% in bonds, 20% in alternative investments, 10% in real estate and 5% in cash.”

According to the report, the expected net return for the assets in 2005 was 4.5%, unchanged from the previous year.

The bank has around 2,500 employees in Switzerland, many of whom are covered by a defined benefit scheme.

It also has several defined contribution schemes, mostly outside of Switzerland where it employs a further 1,000 people. It contributed CHF3.3m to these plans in 2005, down from CHF4.2m in 2004.

Julius Baer is a major Swiss asset manager running CHF182bn, with another CHF122bn being managed on behalf of private clients. It posted pre-tax profit of CHF189m in 2005.

GAM, which has $7.8bn in institutional assets, said in January that it planned to bring investment consultants onboard to generate more business in the global institutional market.

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