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Capital Requirements for Institutional Investors

Dear Reader,

The NAB is proud to present its latest publication on Capital Requirements for Institutional Investors titled "Changing perceptions : An analysis of private debt in emerging markets under Solvency II"

On the occasion, a webinar featured insightful discussions led by experts regarding the report and its findings. We would like to express our gratitude to our panellists: Yvonne Bakkum from FMO, Philippe Smit from a.s.r. Asset Management, and Jos Kalb from Cardano and to our Managing Director, Laure Wessemius-Chibrac, for moderating. We also extend our appreciation to all the attendees who contributed to the success of this event with their questions.

The NAB's findings in this report indicate that the capital charges required for investors to allocate more capital are not excessively high, dispelling market perception. The panellists supported these findings, emphasizing that the report serves as a strong starting point for institutional investors to overcome their reservations about investing in emerging markets. The need for improved data availability to facilitate allocation was mutually agreed upon. The panel pointed at the report as an essential initial step in reconsidering the perception of capital charges. Discussions addressed the illusion of increased risk of illiquidity, the lower volatility of private debt, the challenge of short-termism, and how pension funds view private debt.

Key takeaways from the webinar include:

- The report debunks the idea that investing in emerging markets requires higher capital charges.

- Liquidity can be illusory and often comes at a cost to investors.

- Diversifying private debt can be financially rewarding while also generating a positive impact.

- Private debt in emerging markets possesses long-term benefits that can attract investors.

The Report and the Webinar are now available online!

Laure Wessemius-Chibrac,

Managing Director of the NAB


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