The EUR1.7 billion (USD2.1 billion) APK-Pensionskasse is planning to purchase structured products in the coming months to enhance returns, according to DW's sister publication Global Money Management. Guenther Schiendl, head of asset management in Vienna, said it is looking to allocate 5-10% of its fixed-income assets to structured products by year end. The move is prompted by Schiendl's expectation of European Central Bank interest rates hikes.
APK is interested in a range of instruments, including constant-maturity swaps with collars and callable bonds. Schiendl said it is also open to suggestions from investment banks. "There are a lot of tremendously intelligent people at investment banks who will dream up lots of products which we've never heard of," Schiendl observed. The products must be reasonably liquid and have a weekly mark-to-market valuation. APK is seeking floating-rate products, returning Euribor plus 200-250 basis points, although fixed-coupon structured products might be suitable, he added.
