PSEC 2012 European Legislation Will Be Death Knell for LDI Warns BNP Paribas
31 October 2012 (PLANSPONSOREurope.com) – An impending raft of European legislation could put paid to European pension funds operating Liability Driven Investment Strategies, according to Dietmar Roessler, head of asset owners, BNP Paribas Securities Services.
On the first day of PLANSPONSOR Europe’s 2012 conference in Barcelona today, Roessler told delegates legislation such as the financial transaction tax, MIFID and UCITS was bound to increase costs of such risk mitigating strategies.
“It will increase costs again,” he said. “I think it will be difficult for those funds who are underfunded today to make up the gap to a full LDI strategy.
“If you happen to have a fully funded fund – I don’t think it is potentially a good idea to switch to an LDI strategy.
“There are so many funds after the crisis in the last three years who don’t have that option.”