Private Debt: Alternative Corporate Financing and a Growing Asset Class
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Private Markets
Private Markets encompass investments outside the stock exchange: private equity, private debt, infrastructure, and unlisted real estate. Investors commit capital over multi-year time horizons and gain access to companies and projects that are not tradeable on public markets. In Switzerland, many of these investments are open to qualified investors.
The essentials
- Under FinSA, a qualified investor includes, among others, any person who holds net financial assets of at least CHF 2 million and confirms this in writing.
- Private Markets investments are typically illiquid: capital is often committed for seven to ten years or longer.
- Since 2024, the Limited Qualified Investor Fund (L-QIF) makes it easier for qualified investors to access Swiss vehicles without individual FINMA approval.
- Private Markets serve primarily as a diversification tool; they are subject to market, liquidity, and default risks. Past performance is not an indicator of future returns.
Sources: FinSA Art. 5, Opting out and opting in (fedlex) · CISA Art. 10, Investors (fedlex)
Frequently asked questions about Private Markets
Private Markets encompass investments that are not traded on a stock exchange, such as stakes in unlisted companies (private equity), private credit financing (private debt), infrastructure, and direct real estate. Investors commit their capital for several years and in return bear liquidity and market risks.
Many Private Markets vehicles in Switzerland are exclusively open to qualified investors. These include institutional investors as well as high-net-worth individuals who meet the requirements under FinSA, such as holding net financial assets of at least CHF 2 million and providing a corresponding written declaration.
The principal risks are illiquidity (capital is committed for years), valuation uncertainty (no daily market prices), and market and default risks in individual holdings. Broad diversification across managers, vintages, and sectors can mitigate these risks, but cannot eliminate them. Past performance is not an indicator of future returns.
Private Markets are generally used as a complement to liquid investments, with the aim of increasing diversification and participating in long-term developments. The appropriate allocation depends on your investment horizon, liquidity requirements, and capacity for risk. This does not constitute investment advice.
Minimum commitments have traditionally ranged from six to seven figures, which is why Private Markets were long reserved for institutional investors. Today, semi-liquid fund structures and specialized providers sometimes allow entry at considerably lower amounts. The specific terms differ by fund, structure, and provider.
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This overview is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.
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