Publica, the Swiss Federal Pension Fund, plans a $1.1bn push into direct lending, targeting European mid‑market borrowers with a €500m tranche and a US allocation of $550m. The move marks the fund’s first entry into the asset class and will shift roughly 3 % of its strategic allocation toward mid‑market direct lending, according to a Bloomberg‑source call for proposals.

Publica’s commitment arrives amid growing scrutiny of private credit valuation, especially in US‑focused funds. By allocating 3 % of its portfolio to direct lending, the fund seeks higher yields without boosting public equity exposure. Swiss occupational pensions, which managed over 1.2 trillion Swiss francs in assets in 2024, have historically been cautious but now chase returns to offset longer life expectancies.

Alternatives accounted for just 6.9 % of total industry assets last year, far below the regulatory ceiling of 15 %, leaving ample room for private market managers to grow their European limited‑partner base. Bidders must submit proposals by mid‑May; due diligence will run through the second half of 2026, with mandates expected to launch in early 2027. Publica’s move signals pension allocators’ confidence in long‑duration yield.