BELGIUM - The demand for Liability Driven Investments (LDI) is unlikely to pick up in Belgium given its unsuitability to local pension funds, industry players have agreed.
"I think LDI being something “new” is overstated," said Tom Mergaerts, CFO at the Amonis pension fund in Brussels. "It looks like something new various consultants have dug up but I think has always existed. We don't look at LDI more today than in the past, or less. We do look at it, though"
Chris Desmet, investment consultant at Watson Wyatt, said the fact most local pension funds paid out in lump sums was another key factor behind the low demand for LDI.
"The duration for liabilities is much shorter," said Desmet. "I don't see it as a big thing here."
Marc van Heel, business development manager for Benelux at PIMCO, agreed LDI was "less of an issue" to Belgian funds. Rather, pension funds were looking for high fixed income alpha products, real estate and commodities, he said.
"Hedge fund are quite complex, but there are layered structures there that allow local funds to invest there, so we are also seeing more demand for fund of hedge funds."
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