Episode summary
MPK's CIO on Buying Gold, Dumping Tech and Waiting for Real Estate to Bottom
Summary
Migros Pension Plan has built an active, contrarian investment style around doing much of its work in-house, with Stephan Bereuter arguing that ownership, accountability and discretion inside clear risk limits are more important than internal management for its own sake. He says that setup helped MPK move quickly into insurance-linked securities in 2023 when valuations were depressed by liquidity withdrawals, not just higher expected losses, and that the position still offers useful diversification today.
Bereuter also frames MPK’s current portfolio changes as a response to concentration risk and liquidity management. The fund has raised gold to 3% as a hedge against a large illiquid book and potential cash needs if currency moves reverse, while also shifting equity exposure away from the heavy concentration in US tech toward dividend-paying, balance-sheet-strong companies. He says the goal is not to make sector bets, but to improve portfolio-level risk and return.
In real assets, Bereuter says MPK is re-entering international real estate selectively after stepping aside before the repricing, and is less enthusiastic about data centers than it was two to three years ago. He warns that the boom may be drawing in too much capital too quickly, especially around a few unprofitable AI-linked tenants, and says future opportunities are more likely to be found in medical offices, senior housing and logistics.
Key takeaways
- Bereuter says MPK’s edge comes from internal ownership and accountability, not just running 90% of assets in-house.
- MPK’s 2023 ILS trade was a tactical allocation of about 1% of assets that benefited from liquidity-driven dislocation, and the fund still holds it.
- Gold has been raised to 3% mainly as a liquidity hedge for a large illiquid portfolio, with macro worries about central bank balance sheets and fiscal deficits also supporting the move.
- The fund is trimming its data center enthusiasm because capital has flooded into the space and profitability assumptions may be too optimistic, especially around AI tenants.
- MPK is selectively returning to international real estate where cap rates have reset, but Bereuter says the focus is now on specific underwriting rather than betting on compression.
Notable quotes
“ownership and accountability that drives that difference. So, we have an approach where we give people a lot of responsibility within clear risk limits and guidelines”
“we tried to look for a solution which we could manage internally. We had the expertise internally and could therefore quickly implement the solution as well”
How the episode opens
Hi everyone. Welcome back to another episode of the Allocators Playbook. My guest today is Stefan Breiter, the Chief Investment Officer of the Migros Pension Plan, Switzerland's largest retail sector pension fund, managing close to 30 billion Swiss franc on behalf of Migros employees.
Stefan took over the CIO seat in 2022 after leading fixed income at the fund. And under his watch, MPK has been known for something unusual in the pension world, managing roughly 90% of its assets in-house and using that internal flexibility to make contrarian bets other funds won't touch, from buying insurance-linked securities when everyone else was heading for the exits to building out one of the most aggressive gold positions among European pension funds today. Welcome to the show, Stefan.
Thank you. Thank you. — The burning question that I want to start with is that MPK's success comes from managing 90% of the fund internally. What can a small in-house team actually do that an external manager or a consultant structurally can't? And where does the model really cost you or talent retention, speed, and building expertise in an asset class?
Good question. So, I think maybe in the end it's not about internal management per se makes the difference, but more like ownership and accountability that drives that difference. So, we have an approach where we give people a lot of responsibility within clear risk limits and guidelines, and they get the discretion to take on decisions.
And with that comes a lot of responsibility for the outcomes, and that, of course, drives an accountability. and with that comes intrinsic motivation. So, people are really really motivated and yeah, I think that contributed to the good results in the end.
Absolutely. And so, because it's in-house, it must come, you know, with you have to make sure that good you retain good talent, you have to choose the right people.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ils opportunities
- gold as liquidity hedge
- international real estate
- data center allocation
- student housing and logistics
Companies and tickers mentioned
- Migros Pension Plan
Watch the episode
Watch “MPK's CIO on Buying Gold, Dumping Tech and Waiting for Real Estate to Bottom” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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