Activity report 2022

Report of the Chairman of the Board of Directors and of the Director

2022 was marked in February by the outbreak of the conflict in Ukraine, which put an end to the post-pandemic economic recovery. The shockwave then spread around the globe, shaking not only the peace and sense of security in Europe, but also the global economy and financial markets. Increasing geopolitical tensions compounded these problems as the year progressed.

Rising energy prices, sanctions, the blocking of trade routes and the prospect of gas, electricity and food shortages fuelled inflation in 2022. Inflation soared into double digits in many countries, forcing central banks to raise interest rates much higher than expected. This led to a fall in equity and bond prices and a rapid deterioration in the economic outlook.

"In 2022, inflation crossed the 10% threshold in many countries."

These global distortions also affected Switzerland. While inflation remained contained by global standards, the Swiss franc appreciated sharply.

Negative investment result

In this difficult environment, compenswiss achieved an investment result of –‍12.85% (market portfolio after hedging; previous year: 5.28%). 

–‍12.85%

Investment result

This negative performance reflects unrealised book losses, as the assets were not sold. The average net return over the past 10 years remains positive at 2.4%.

2.4%

Average net return over the last 10 years

The difference between the performance of compenswiss and that of other institutional investors is due to the specific mandate of the institution and the associated high liquidity requirements. These requirements allow only a small proportion of long-term investments, such as direct real estate in Switzerland, a segment that has proven to be resilient in 2022. The more liquid investment categories (bonds, equities, real estate funds and real estate shares), in which compenswiss primarily invests, were severely affected in 2022.

Expressed in terms of social insurance, the net returns achieved are –‍12.38% for the OASI, –‍11.24% for the InvI and –‍12.21% for the LEC. The slightly less negative result for InvI is explained by higher cash reserves. The InvI's liabilities to the OASI still amount to approximately CHF 10 billion. The total assets managed by compenswiss amounted to CHF 37.3 billion at the end of 2022 (previous year: CHF 40.9 billion).

CHF 37.3 billion

Total assets under management by compenswiss

 

OASI reform strengthens the Fund

With the OASI 21 reform, the Swiss people and the cantons approved a gradual increase in the retirement age for women to 65 in September 2022. In addition, the OASI will receive additional funds from the increase in VAT from 2024. These measures are expected to reduce the burden on the OASI fund by an estimated CHF 12.4 billion over the next few years and should ensure the financing of the OASI until 2030.

"Reduction of the burden on the OASI fund is estimated at around CHF 12.4 billion over the next few years."

Responsible investment

compenswiss has long assessed its investments from a sustainability perspective. The institution continues to exercise its voting rights on the Swiss equities it holds and has continuously tightened its environmental, social and governance (ESG) criteria. This responsible approach has led to an acceleration of divestments in recent years, notably in the coal sector. In the area of sustainability, the institution has developed measurement tools that enable it, for example, to quantify the climate compatibility of the portfolio against the "Swiss Climate Scores" adopted by the Federal Council.

"Stepping up its requirements on environmental, social and governance (ESG) criteria."

Activities of the Board of Directors and its Committees

In 2022, the Board of Directors addressed issues such as crisis management and the impact of inflation, and continued its work on the risk control and the investment process.

In addition to analysing market developments, the Investment Committee focused on the implementation of the new investment process. Together with the Executive Committee, it established the new asset allocation and submitted its proposals to the Board of Directors.

The Audit and Personnel Committee dealt with external and internal audit issues. It also worked on the approval process for the annual report, regulatory issues and personnel matters.

Photo: Luxwerk

Board of Directors

From left to right: Roland Müller, Daniel Lampart, Ruth Meier, Gabriela Lenherr, Manuel Leuthold, Sandra Gisin, Bruno Parnisari, Michaela Troyanov, Karl Stefan Mäder
Absent: Urs Eggenberger, Cristina Maderni, Henrique Schneider, Beat Schwaller
 

Operations and resources

The number of staff employed by the institution has increased slightly to 61 persons or 57 FTE in 2022 (57 and 54 respectively in 2021). The ratio of operating costs to assets remains low at 0.12%.

0.12%

Ratio of operating costs to assets

In the year under review, the institution's website was modernised. A video published on the website provides an animated explanation of who compenswiss is.

Throughout the year, employees were sensitised to the issue of information security through interactive training modules.

compenswiss also joined the Swiss federal government's energy saving alliance. By lowering the temperature in the offices, for example, the institution helped to reduce its energy consumption.

"compenswiss also joined Swiss federal government's energy saving alliance."

Changes in the Board of Directors and acknowledgements

The Board of Directors of compenswiss saw departures as well as arrivals in 2022. Bénédicte Montant left the Board at the beginning of the year. She was followed in the summer by Beat Schwaller and Karl Stefan Mäder, and at the end of the year by Daniel Lampart and Henrique Schneider. We would like to thank all our former Board members for their valuable contributions and we wish them all the best for the future.

We are delighted to welcome three new members to the Board: Cristina Maderni, Philippe Augsburger and Adrian Wüthrich. We wish them much satisfaction and success in their new roles.

We would like to thank the Board of Directors and all of our employees for their outstanding commitment during the past year.

Photo: Luxwerk

Executive Committee

From left to right: Marc Pfenninger, Frank Juliano, Francesca Azzi Price, Vivien Ravel, Eric Breval, Gaëlle Barlet


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