Since 2007 the Austrian Lawyers Pension System (ALPS) has offered its pension fund members access to an efficient lifecycle investment model that has outperformed the average performance of its peers significantly since inception. All Austrian lawyers can currently choose between three different portfolio allocations for the investment of their retirement pension savings to meet their personal risk appetite and evolving personal circumstances.

In the aftermath of the COVID crisis at the end of 2021, ALPS decided to abolish two existing portfolios with defined risk budgets of 2% and 5% per annum respectively based on capital protection strategies, while adding a new passive portfolio with an allocation to equities of 15% to its existing successful passive investment solutions based on allocations of 30% and 50% to equities.

In 2022 a revised asset allocation policy was introduced, incorporating a 30% allocation to alternatives in all three portfolios at the expense of their fixed income holdings. This enables members to switch more efficiently between the different options over their lifetime despite existing liquidity restrictions in alternative assets.

With regard to the structural implementation, ALPS favours individual Austrian investment funds for money market investments, bonds and equities, while a bespoke Luxembourg SICAV was established for its alternatives portfolio that currently consists of investments in private equity, infrastructure, European real estate, commodities and hedge funds.

ALPS’s ESG-approach is pragmatic and clear with 50% of the equity and corporate bond fund investments needing to comply with environmental and social objectives according to Article 8 or Article 9 of the Sustainable Finance Disclosure Regulation (SFDR). Though the progress of ESG-related investment concepts in alternative assets is trailing in numerous segments, ALPS is considering applying the same principles to this segment.