Anouk Agnes, who returned earlier this month from a trip to Columbia and Peru, said Ucits funds are reported to account for 100% of the non-Peruvian funds that managers of that country’s mandatory pension schemes are permitted to buy, with officials in Colombia reporting a similar near sweep of the non-Colombian funds held by that country’s mandatory pension funds.
The reason for this strong preference for Ucits funds, Agnes noted, is because these mandatory pension schemes are restricted in the types of funds they are legally permitted to buy, and therefore must stick to funds that are deemed the safest – something that the Ucits regulatory framework is seen as ensuring.
“What we noticed as well was that the Ucits funds these pension funds are buying, almost 100% of them are Luxembourg-domiciled Ucits,” Agnes added, attributing this to Luxembourg's association with the Ucits product.
In Latin America, not just pension fund managers but governments and regulators as well are surprisingly familiar with the Ucits brand and what it means, Agnes noted.
Agnes revealed these observations aboaut her recent trip during an interview between sessions at a two-day Association of the Luxembourg Fund Industry event, which concluded this afternoon in Luxembourg.
$110bn in pension fund assets
With Colombia’s mandatory pension funds containing some $70bn in assets under management and Peru’s $40bn, the estimated 10% and 36%, respectively, that they reportedly hold in Ucits vehicles is, Agnes argues, a tribute to the success of the Europeans who developed the Undertaking for Collective Investments in Transferable Securities – as well as a possible case for optimism about the AIFM directive.
Agnes's trip to South America, at the end of October, was her second this year; in May, she and Alfi chairman Marc Saluzzi travelled to Brazil, Peru and Mexico. At least one trip is planned for next year, she said.
Asian fund passport
Agnes said she is often asked whether Alfi views the plans in Asia to develop a regional cross-border funds regime similar to Ucits as competition.
"Maybe, one day," she said. "But for the moment, we understand why they are doing it. And I think there is still a huge opportunity for Europe's Ucits product to be the gateway to the world for Asian investors."
