Vlaamse Gemeenschap Pensioensfond, a Belgian public authority pension fund worth EUR180 million, is mulling a EUR5-10 million investment in collateralised debt obligations. Georges Stienlet, president of the board and managing director in Brussels, said the low interest rate environment in the country at the moment has led the scheme to consider alternative asset classes. "In the short-term there could be a rise in interest rates but [the fund's board] does not expect this to be significant," he explained.
The scheme's target rate of return is 4%, but with its current asset allocation a shortfall is expected, Stienlet noted. Its investment strategy is heavily invested in government bonds--70% of Vlaamse's assets--therefore, the bond portfolio would be cut to fund the move.
