Greater adoption to swing pricing, according to ALFI
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Greater adoption to swing pricing, according to ALFI 21 December 2015Luxembourg Reporter: Becky Butcher
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The recent trend towards greater adoption of swing pricing continues, according to ALFI’s Swing Pricing Survey.
The survey shows both a greater number of participants responding to the survey and a greater number of asset managers that have implemented the mechanism.
Swing pricing, which has been applied in Luxembourg for the past 15 to 20 years, has proven to be an efficient mechanism to protect existing shareholders from dilution associated with shareholder purchases and redemptions.
In this year’s survey has been produced in more details to look into how swing pricing is currently applied by asset managers, common trends, emerging themes and the challenges the industry faces in this regards.
The survey was conducted from July to September 2015 and 45 companies participated to the survey.
Two out of three respondents, who manage a combined $1,900 billion of net assets, 54 percent of total assets under management in Luxembourg funds, apply swing pricing.
According to the survey, over half of the asset managers not yet applying swing pricing stated they were in the process of evaluating it, and wanted to understand more about the key principles, drivers and theories.
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