BELGIUM - Pension funds have reacted with scepticism to a suggestion by the Belgian Association of Pension Institutions (ABIP) chairman that they invest in the multi-billion euro transportation works in Antwerp, citing a hesitance to be tied down long term with the government.
ABIP’s Phillip Neyt had suggested such a move might prove an attractive investment that matched pension fund liabilities and simultaneously benefitted the country’s economy in general, but Tom Mergaerts, CFO at the €800m Amonis pension fund, said there was “huge political investment risk” involved.
Mergaerts stressed the debate was still hypothetical as Neyt had yet to directly approach any pension funds, but added: “How can we be sure the government won’t just take the assets away from us in five years’ time, saying ‘this is ours’, like they did with the Belgacom pension fund.”
Edwin Meysmans, managing director of the €870m KBC pension fund, said the Antwerp infrastructure project would also be “far too complicated” for them. “We would just be financing and that’s it, not taking any of the promotion risks,” he said.
Chris Desmet, investment consultant at Watson Wyatt, agreed the investment had attractive long term prospects, but added that was irrelevant given the sheer size of the undertaking and the limited size of local funds. “The problem is the road works in Antwerp cost a massive a mount of money, maybe more than pension funds could invest,” he said.
Edwin de Boek, MD of KBC Asset Management, claimed infrastructure investments as a whole were an attractive prospect from an economic perspective, but pointed out that funds contributing to the financing of public infrastructure would increase their exposure to the government. “Why would they do that when they already have a lot of government bonds,” he asked.
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