EU due to issue white paper on pensions directive

As unquote" reported in January, the Institutes for Occupational Retirement Provision (IORP) Directive could impose new capital requirements along the lines of Solvency II on pension funds.

Forcing pension funds to focus their investments on fixed income assets, as opposed to alternative investments, could deprive the private equity industry of a massive chunk of financial sponsorship. 

"The EU is right to focus on this issue but making it too costly to invest in long-term growth through say, private equity, venture capital or infrastructure is clearly not the way to defuse this bomb. In fact, by redirecting investment away from growing companies, it could make a bad situation much worse," said Klaus Bjorn Rhune, chairman of the EVCA Limited Partners Council and partner at ATP Private Equity Partners.

Meanwhile, the European sovereign debt crisis has generated volatility on bond markets, making an involuntary move of pension funds into bonds less credible.

The Commission's consideration of the technical advice received from organisations such as EVCA and the European Insurance and Occupational Pension Authority (EIPOA), and the proposed review of the directive, is therefore welcomed by the industry.

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• Topics
• Regulation
• EVCA
• EU Commission