Sun, Jun 25, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Solvency II may deter insurance companies from investing in hedge funds

Monday, October 29, 2012

Benedicte Gravrand, Opalesque Geneva:

Some people think that the regulatory push for more collateral will not be so much of an issue for hedge funds (see Opalesque Exclusive here). However, not everybody agrees with that view.

The Solvency II Directive is a European Union (EU) Directive that codifies and harmonises the EU insurance regulation. It mainly concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency. Once the Omnibus II legislation is approved by the European Parliament – and this might now not happen before March 2013 - Solvency II will be scheduled to come into effect in 2014 or 2015. Often called "Basel for insurers," Solvency II is somewhat similar to the banking regulations of Basel II.

The current draft directive allocates a 49% capital requirement for investment into hedge funds, private equity and other alternative assets (classified as "other equities"). This means that for every euro invested in such funds, insurers will be forced to put aside additional cash to cover their investments, reduce their allocation to the asset class or withdraw from investing in such funds altogether (TheDeal).

Pe......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. FinTech - Rise of robots: Inside the world's fastest growing hedge funds[more]

    From Bloomberg.com: Believe the hype. Quants have never been more popular. After doubling over the past decade, assets run by so-called systematic funds have hit a record $500 billion this year, according to estimates from Barclays Plc. In some ways, their meteoric rise is due to the same technolog

  2. Legal - Bond market concerns could scuttle Paulson's Fannie-Freddie plan[more]

    From Bloomberg.com: A hedge fund proposal for freeing Fannie Mae and Freddie Mac from U.S. control is poised to face stiff opposition from investors who say it risks wrecking the mortgage-bond market. The Moelis & Co. blueprint, which firms including Paulson & Co. and Blackstone Group LP sponsored,

  3. Other Voices: Are your pricing policies and procedures for less liquid instruments adequate?[more]

    Komfie Manalo, Opalesque Asia: The unrelated position mismarking incidents that quickly precipitated the closures of both Visium Asset Management and Marinus Capital have been recent focal points for market participants, but regulatory scrutiny of valuation choices for less liquid instruments is

  4. FinTech - AI hedge fund Numerai now live on Ethereum, Cryptocurrency hedge funds generate huge returns as bitcoin surges[more]

    AI hedge fund Numerai now live on Ethereum From Cryptoninjas.net: Back in February, Numerai announced numeraire (NMR), a cryptographic token to incentivize a new kind of hedge fund built by a network of data scientists. Earlier today, the Numeraire smart contract was officially deployed

  5. Investing - Advisors slash hedge fund positions, Theravance Biopharma is a top pick of investment guru Seth Klarman, As asset management industry grows a search for new revenue streams[more]

    Advisors slash hedge fund positions From Barrons.com: Financial advisors have cut wealthy clients' exposure to hedge funds by up to one third over the past 12 months, The Financial Times reports. Advisor firms in the FT's annual top-300 ranking have reduced their hedge fund allocation to