US/EUROPE - Institutional investors decreasing their holdings of convertibles over the last year has led to a decline in the total long market value of funds, research from Greenwich Associates has shown.
In its latest study, Greenwich Associates revealed institutional holdings of convertibles in the US and Europe declined around the middle of this year.
This resulted in a drop in market value with an 8% slide in the US, to US$220bn and a 20% decrease registered in Europe resulting in a value of €110bn.
"Although our research does not indicate the convertible bond market has grown over the past year, there are at least signs that it is stabilising,” said John Feng, Greenwich Associates consultant.
He noted there had been a sharp increase in leverage ratios with the US going up from 2.4 to 3.0 and Europe posting a ratio of 3.0 up from 2.3 in 2005.
"These findings suggest that hedge funds are seeing increased opportunities in convertible arbitrage,” Feng said.
Although hedge fund ratios could have been affected by a number of factors, the increases were said to be an optimistic sign for investors.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.