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Beverly Chandler, Opalesque London: A study by Greenwich Associates entitled the 2012 Continental Europe Investment Management Study shows that European institutions feel trapped and stymied by new regulations, unable to find ways to improve portfolio returns in a challenging investment market.
European institutional investors are coming under increasing pressure by historically low interest rates and the protracted European sovereign debt crisis, the firm writes. "Perhaps one exception is the Nordics where policy makers have been working with the industry on finding some flexibility for investors to meet long-term funding requirements" Greenwich says but finds that in the rest of mainland Europe the dual impact of low interest rates and a troubled European government bond market has depressed returns on fixed-income investments, a fact that Greenwich finds is a hard blow to institutions whose portfolios are dominated by bonds in general and sovereign bonds in particular.
"Regulations and regulatory uncertainty have caused institutions throughout much of Continental Europe to put off or limit alterations to investment strategies that would diversify their portfolios away from European government bonds and other fixed-income investments," says Greenwich Associates consultant Marc Haynes. "In o...................... To view our full article Click here
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