Dutch pension funds criticize EU hedge fund rules
The Dutch pension fund sector has joined criticism of a European Union regulatory directive for hedge funds and private equity, saying the new rules may cut investment opportunities and raise costs.
The EU’s draft “Alternative Investment Fund Managers” directive published in April aims to tighten regulation and increase information disclosure for hedge funds and private equity firms to quell public anger over financial market excesses.
“The inefficiencies that would sprout from the Proposal will ultimately need to be borne by current and future pensioners and could be reflected in higher pension premiums and lower net payout,” Dutch pension managers said in a letter addressed to the European Commission.
The letter, dated Aug 27 and obtained by Reuters on Friday, was signed by APG, which manages funds for the world’s third largest pension fund ABP, and by PGGM, Mn Services and others, representing about 450 billion euros ($642.1 billion) in assets, the letter said business cards design.
European hedge funds and private equity organizations have already said the EU draft was hastily made, while British pension funds said the directive could damage investment choice and hit returns.
The Dutch pension managers said they were willing to advise the European Commission in case the directive is revised and said the current draft may “not reach its intended objective to reduce the systemic risk as experienced under the current financial crisis.”
The pension managers had about 90 billion euros invested in alternative investments such as hedge funds, and the extent to which these assets have contributed to the financial crisis was “perhaps less clear than the Proposal claims it is,” the letter said.
(Reporting by Gilbert Kreijger; editing by Chris Pizzey)