This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
| less than a minute read

EIOPA Looks again at Real Estate Capital Charges

Direct and indirect investment by life insurers in real estate is hardly newsworthy, but the European oversight body, as part of its longstanding review of the S2 regime has ear-marked the capital charges associated with real estate investing for extra scrutiny - and the word on the street is that charges for both REIT's and unlisted vehicles could be relaxed.

One of the dilemmas which insurers face when considering real estate investments of all categories concerns selecting an appropriate vehicle in which to invest: REIT, UCITS/OEIC fund or private and direct investing.  To date, capital charges for unlisted, direct investments have been at a premium to their listed counterparts and this has in part been responsible for a wave of recruitment in structuring, credit, securitisation and other specialist personnel to the investment offices of life companies and their managers in recent years.  Recent lobbying by trade associations representing both listed and unlisted real estate organisations suggests that the goal posts could be about to be moved...

European property companies are pushing regulators to relax the rules that curtail investment in real estate by insurers, a reform that would trigger massive new capital flows. The push to attract more business from some of the region’s biggest institutional investors comes at a time when valuations across many of Europe’s property markets are already trading at record levels. An index that tracks the region’s biggest listed property companies has a combined market capitalisation of around €247bn, according to the European Public Real Estate Association, an industry body.

Tags

executive search, recruitment, life insurance, alm, asset management, solven, ldi, insurance solutions

Please contact us for further information