Queries over rating agencies raised at InvestmentEurope Forum

InvestmentEurope’s Pension Fund Forum in Zurich has heard that rating agencies face significant questions over their ongoing business models.

Marc Chesney, professor of Finance at Universität Zürich, said that analysis of the history of the big three rating agencies – Standard & Poors, Moody’s and Fitch – as well as their business models ongoing raised questions about their role in relation to requirements from pension fund investors.

Because of what happened during the Lehman Brothers crisis and thereafter, there are questions around how the models give rise to issues such as conflicts of interest, he said.

The Forum, which continues through 16 May, has also heard about the opportunities in sectors such as healthcare, education and banking in emerging markets, but particularly in Latin America and Asia – from Thomas Melendez, institutional portfolio manager at MFS, and about how UK manager Standard Life Investments, went about rethinking its approach to governance as it adjusted the approach to absolute return in order to better manage risk for its own portfolio.

A panel discussion has covered issues of active mandates in the Swiss pension frunds market, and delegates have heard input into the theme of corporate governance, and how pension fund investors can implement positions ahead of annual general meetings in companies whose shares they hold.

A full report on the event will be included in next month’s issue of InvestmentEurope.

 

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