목차
Title page
Contents
Acknowledgements 4
Executive summary 10
1. Introduction 16
2. Market overview 20
2.1. Size of European pension and insurance markets 20
2.2. Emerging market asset allocation by Europe's 35 largest institutional investors 21
2.3. Structural changes in pension markets 25
3. Drivers of ICPFs' investment behaviour: changing stakeholder expectations 29
3.1. Governments 29
3.2. Trustees and beneficiaries 30
3.3. Shareholders 32
3.4. Civil society 33
4. Drivers of ICPFs' investment behaviour: financial market conditions, cost and performance 34
4.1. Recent developments in financial market conditions since 2015 35
4.2. Performance in perspective 37
4.3. Cost of EMDE investment 39
5. Drivers of ICPFs' investment behaviour: legal and regulatory frameworks 45
5.1. Overview of legal and regulatory frameworks 46
5.2. Behavioural approaches: prudent person principle 47
5.3. Rules-based approaches: quantitative limits on asset allocation 48
5.4. Capital and solvency requirements for pension funds 49
5.5. Capital and solvency requirements for insurance companies 50
5.6. ESG risks and impacts 57
5.7. Climate change 63
6. Findings and recommendations 67
6.1. Addressable market for mobilising capital into EMDEs 67
6.2. Market structure 68
6.3. Regulations 69
6.4. ESG risks and impacts 70
6.5. Investor behaviour and operational practices 70
6.6. Other issues for further research 71
Conclusion 75
References 76
Appendix 1. The potential for increased EMDE investments by large European ICPFs 81
Appendix 2. Overview of the five insurance and pension markets studied 83
Appendix 3. Conceptualisation of fiduciary duty by studied country 86
Appendix 4. Examples of how MDBs and DFIs can help ICPFs invest in EMDEs 88
Table 1. Types of regulatory approach 47
Table 2. Additional quantitative restrictions on pension fund investment 49
Table 3. Spectrum of ESG integration in legal and regulatory rules for ICPFs 59
Table 4. Overview of studied insurance and pension fund markets 83
Table 5. Conceptualisation of fiduciary duty by country 86
Figure 1. Market coverage 2020 21
Figure 2. Top five markets for pension and insurance, total investments 2020 21
Figure 3. Top pension funds of the sample by assets in developing countries, 2022 22
Figure 4. UK pension fund overseas portfolio allocation, by region, 2022 23
Figure 5. UK pension fund EMDE portfolio allocation, by country, 2022 23
Figure 6/Figure 5. Top insurance companies of the sample by assets in developing countries, 2022 24
Figure 7/Figure 6. Risk appetite of European insurance companies 25
Figure 8/Figure 7. DB and DC asset allocation, by country, 2022 26
Figure 9/Figure 8. EMDE portfolio flows 2018-2022 36
Figure 10/Figure 9. The dollar and capital flight away from EMDEs 37
Figure 11/Figure 10. Performance of US market, developed markets excluding US, and emerging markets (2002-2021) 38
Figure 12/Figure 11. Emerging market versus developed market bond index performance, 2008-2024 39
Figure 13/Figure 12. Median stated (active) management fees, by region, allocation size, and capitalisation (cap) 41
Figure 14/Figure 13. Active versus passive management returns net of fees, 2014-2019 43
Figure 15/Figure 14. Estimated capital charge (EIOPA, Solvency II) for 10-year unrated project loans with diversification 52
Figure 16/Figure 15. Emerging market credit rating distribution, December 2023 54
Figure 17/Figure 16. MSCI Emerging Markets and ESG Leaders Equity Index, percent allocation to lower- and upper-middle income economies, 2018-2022 63
Figure 18/Figure 17. Estimating annual investment flows to EMDEs by the 35 largest European ICPFs 81
Figure 19/Figure 18. Achieving a $0.5 trillion EMDE allocation in ten years 82
Figure 20/Figure 19. Achieving a $0.5 trillion EMDE allocation in five years 82
Figure 21/Figure 20. The IFC Amundi deal and the role of MDBs 90
Boxes
Box 1. What are EMDEs? 16
Box 2. UK pension funds geographic allocation of assets in EMDEs 23
Box 3. Insurance company preference for investment grade assets 25
Box 4. An explainer: defined benefit and defined contribution schemes 27
Box 5. Stakeholder terminology 30
Box 6. Active versus passive strategies in EMDEs 43
Box 7. Studies on Solvency II capital charges for non-OECD infrastructure 52
Box 8. Tied assets 56
