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Pension pooling market could be worth E1trn

EUROPE – The European pension pooling sector could be worth up to a trillion euros within five years, says a senior State Street executive.

“We’re talking about very big asset pools,” Willie Slattery, managing director of State Street (Ireland) Ltd., told IPE. There was up to 50 billion euros available to be invested at the moment, with the figure “in the hundreds of billions - perhaps approaching one billion euros” over five years.

Speaking at an industry conference in London, he added there was “very real interest” from investment managers, citing Barclays Global Investors, Deutsche Asset Management and State Street itself. He said it was a “market imperative” for firms to be involved – and that there was a “very very material” impact on returns.

Slattery was involved with the setting up earlier this year of DeAM’s Ireland-based Common Contractual Fund. The Deutsche GlobalSpectrum CCF was the first pooled fund to use tax breaks to enable pooled funds to buy US equities without incurring US withholding tax.

“I believe pan-European pension funds are some way off,” Paul McGovern, tax partner at KPMG, told delegates. “But there are significant savings to be had by pooling assets.”

The conference was also told that Ireland plans to introduce non-UCITS Common Contractual Funds – which means that they will be able to allow the investment in hedge funds.

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