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24 March 2002

FT: Europe set to limit high-risk holdings




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“European Union countries are considering radical proposals to restrict company pension funds' exposure to high-risk investments“ the FT states.

“The Spanish delegation has proposed introducing specific limits on pension funds' freedom to put money into unlisted investments, such as private equity, hedge funds, real estate and derivatives. The move is an attempt to break an 18-month log jam on plans for EU-wide rules on pension funds, which have been stalled by opposition from several governments.”

“The proposal by the Spanish delegation - dubbed 'prudent person plus' as it combines the prudent person principle with some limits - is seen as a compromise. It has not, however, been formally backed by the Spanish presidency.”

“But the Spanish proposal calls for limits on high-risk investments such as private equity, hedge funds, real estate and derivatives, and as well as the fund's own company. This could impede Europe's fast-growing alternative investments industry, just as it is appealing to pension funds for a larger share of their money. “

See full FT article
See also related FTarticle of 25 March “Europe set to limit high-risk holdings: Plans to restrict pension funds' investment in private equity, real estate and derivatives.”

© Financial Times


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