The municipal pension fund may be the victim of an alleged investment scandal.
Ruvercap is the name of the investment company that is believed to be at the center of an investment scandal. According to the financial websites ” finews.ch ” and ” Inside Paradeplatz “, the victims included banks, asset managers and family offices as well as pension funds – including the pension fund of the city of Zug. The reports put the damage for investors at up to 500 million francs.
According to media reports, all investors have invested in funds that are registered in Ireland. These funds were set up by Zurich-based Ruvercap Investment founded by Jon Turnes & Marc Clapasson who now operates GapBridge AG. The funds held debt securities from the Swiss and international private market totaling around CHF 700 million.
Only: What is left of the money is not clear. The number of around half a billion francs that is likely to be uncollectible is mentioned. A person familiar with the situation told finews.ch: “350 million francs are definitely gone, it’s probably more like 500 million.” Ruvercap securitized – i.e. guaranteed – loans or receivables from SMEs that were collected by so-called intermediaries and put them into credit instruments. In the case of Ruvercap in funds. The intermediaries, in turn, received loans to finance their debtors from the institutions operating the lending instruments (see box). Ruvercap, which advertises on its website www.ruvercap.com with the slogan “We make private debt work” (“We make private debt work”), has apparently become a victim of its own success. In the prevailing negative interest rate environment, it promised returns of 2 to 3 percent and was thus able to win numerous customers. This is also because such funds fed by promissory notes are not dependent on stock market developments. Ruvercap is said to have subsequently succeeded in getting various large bond dealers on board – and from then on the investors are said to have practically thrown the money at them. The result: Ruvercap gave more and more credit and liquidity to companies and probably neglected risk management. With the corresponding consequences. to get various large bond dealers on board – and from then on the investors are said to have practically thrown the money at them. The result: Ruvercap gave more and more credit and liquidity to companies and probably neglected risk management. With the corresponding consequences. to get various large bond dealers on board – and from then on the investors are said to have practically thrown the money at them. The result: Ruvercap gave more and more credit and liquidity to companies and probably neglected risk management. With the corresponding consequences.
This is how the system works
(haz) The mechanism by which Ruvercap conducted its business is relatively simple: until the emergence of specialized firms, microcredit banks bore the risks of lending themselves, usually at high interest rates. Over time, the small credit banks fared better if they only kept the loans for a short time and then handed them over to special intermediaries. The banks were left with a small interest. The specialized intermediaries looked for such consumer loans at numerous banks in order to bundle them. They used it to build so-called vehicles. These vehicles were then domiciled abroad and shares were sold to interested investors. The Ruvercap funds set up in Ireland in Swiss francs, euros and US dollars are also vehicles.
The pension fund of the city of Zug is not the only alleged victim. Ruvercap’s investors include illustrious institutions such as the Freiburger and Graubündner Kantonalbank, the financial institutions Notz Stucki and Puret Pictet Turrettini, the private bank Edmond de Rothschild and, as finews.ch reports, the pension fund of the Canton of Thurgau as well as other investment companies, banks and asset managers , also from abroad.
In March 2019, when a company that collected claims for Ruvercap failed to make payments, things got tight. At the request of the investors, Ruvercap Investment was replaced by an Austrian investment manager. This is now trying to find out how big the hole is that Ruvercap has torn at the various investors. According to the finews.ch platform, investors are increasingly talking about investment fraud. Because the company construct uses complex structures and is therefore considered to be hardly transparent.
FDP parliamentary group wants information from the city council
Now the municipal politicians have also become aware of the impending losses of the municipal pension fund. The FDP faction in the large municipal council wants to know from the city council how great the financial damage is that the pension fund has suffered as a result of investments in Ruvercap. In addition, information should be given as to whether the level of coverage of the fund has changed due to the investments and how the city council is planning to minimize the damage. The city council itself does not comment on the interpellation. The city will not comment on this before the pension fund has informed the beneficiaries.
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