Gschäftsbericht 2018

114 | Galenica financial statements 2018 Finance Notes to the consolidated financial statements of the Galenica Group Investment structure of plan assets in thousand CHF 2018 2017 Cash and cash equivalents 34,818 4.3% 34,363 4.2% Debt instruments 159,750 19.6% 161,206 19.5% Equity instruments 334,713 41.2% 358,427 43.4% Real estate 191,358 23.5% 192,361 23.3% Other investments 92,457 11.4% 79,492 9.6% Fair value of plan assets 813,096 100.0% 825,849 100.0% Current return on plan assets (4.9%) 10.3% The Board of Trustees is responsible for investing the plan assets. It defines the investment strategy and determines the long-term target asset structure (investment policy), taking into account the legal requirements, objectives set, the benefit obligations and the foundationsʼ risk capacity. The Board of Trustees delegates implementation of the investment policy in accordance with the investment strategy to an investment committee, which also comprises trustees from the Board of Trustees and a general manager. Plan assets are managed by external asset managers in line with the investment strategy. Cash and cash equivalents are deposited with financial institutions with a rating of A or above. Debt instruments (e.g. bonds) have a credit rating of at least BBB and quoted prices in active markets (level 1 of the fair value hierarchy). They can be investments in funds and direct investments. Equity instruments are investments in equity funds and direct investments. These generally have quoted prices in active markets (level 1 of the fair value hierarchy). Equity instruments include shares of Galenica Ltd. with a fair value of CHF 10.7 million (previous year: CHF 11.1 million). Real estate relates to both residential property and offices. These can be investments in quoted real estate funds (level 1 of the fair value hierarchy) or direct investments (level 3 of the fair value hierarchy). If real estate is held directly, it is valued by an independent expert. Other investments consist of hedge funds, insurance linked securities (ILS), senior loans, private equity and receivables. There are receivables from Group companies amounting to CHF 21.3 million (previous year: CHF 17.7 million). Investments in hedge funds are classified as alternative investments. They are primarily used for risk management purposes. In most cases, quoted prices in an active market are not available for hedge funds investments (level 2 or level 3 of the fair value hierarchy). The use of derivative financial instruments is only permitted if sufficient liquidity or underlying investments are available. Leverage and short selling are not permitted. The pension funds manage the assets of 4,870 active members (previous year: 4,739) and 773 pensioners (previous year: 745). Galenica does not use any pension fund assets.