Sin ttulo de diapositiva

1
II International Pension Funds Conference
PENSION FUNDS INVESTMENTS Trends, Regulations
and Corporate Governance
inverco
Santiago, 15 March 2001
2
2/13
A. INVESTMENT PRACTICES

• Restrictions
• Portfolio breakdown
• Different speeds
• Directive proposal

B. CORPORATE GOVERNANCE

• Growth of institutional ownership
• OECD principles
• Shareholder activism
• Social Responsible Investments

inverco
3
3/13
A. INVESTMENT PRACTICES

• Restrictions

inverco
4
4/13
A. INVESTMENT PRACTICES

• Portfolio breakdown ()

Source William Mercer (data 2000)

• Prudent man rule vs. Restrictions
• Introduction of EURO

inverco
5
5/13
A. INVESTMENT PRACTICES

• Different speeds

Sources European Commission, William Mercer
inverco
6
6/13
A. INVESTMENT PRACTICES

• Directive proposal (I)

• Invest in a prudent manner
• DC Schemes
• ensure security, quality, liquidity
• proper diversification
• sponsoring undertaking ( lt5 )
• Assets to cover technical provisions
• nature and duration of benefits
• proper diversification
• sponsoring undertaking ( lt5 )

inverco
7
7/13
A. INVESTMENT PRACTICES

• Directive proposal ( II)

• States not require particular categories of
  assets
• States not prior approval or notification
  requirem.
• Investment possibilities
• Traded shares or corporate bonds
• assets covering technical provisions up to 70
• DC schemes 100
• Non-matching currencies at least 30
• Risk capital markets
• States more stringent rules (prudential
  reasons)

inverco
8
8/13
B. CORPORATE GOVERNANCE

• Growth of institutional ownership (I)

• 1981 3,2 BILLION US DOLLARS
• 1991 15,6 BILLION US DOLLARS
• 1998 30,3 BILLION US DOLLARS

AVERAGE ANNUAL GROWTH RATE (1990-1998)
Source OECD Institutional Investors 2000
inverco
9
9/13
B. CORPORATE GOVERNANCE

• Growth of institutional ownership (II)

INSTITUTIONAL INVESTORSDISTRIBUTION
Insurance Companies 36
Pension Funds 32
Pension Funds 28
Insurance Companies 27
19 Investment Funds
30 Investment Funds
17 Others
11 Others
1.990
1.998
Source OECD
inverco
10
10/13
B. CORPORATE GOVERNANCE

• Growth of institutional ownership ( III)

1998 FINANCIAL ASSETS ( GPD)
3.516
inverco
11
11/13
B. CORPORATE GOVERNANCE

• OECD principles

• Right of shareholders
• Equitable treatment of shareholders
• Role of stakeholders
• Disclosure and transparency
• Responsabilities of the Board

inverco
12
12/13
B. CORPORATE GOVERNANCE

• Shareholder activism

• Iniciatives
• Calpers
• TIAA-CREF
• Hermes
• Commitments to exercise fiduciary responsa-
• bilities (voting)
• US ERISA
• UK NAPF
• European iniciatives
• Cadbury and Greenbury Codes
• Others Viennot, Olivencia
• Deminor

inverco
13
13/13
B. CORPORATE GOVERNANCE

• Social Responsible Investments

• Indexes Domini
• Consultants EIRIS
• UK Disclosure obligation

inverco
14
II International Pension Funds Conference
PENSION FUNDS INVESTMENTS Trends, Regulations
and Corporate Governance
inverco
Santiago, 15 March 2001