Securitisation can play a role in unlocking liquidity for Europe’s savings and pensions market, but the sector must improve transparency, standardisation and regulatory alignment to scale effectively, panellists said at Funds Europe‘s European Fund Finance Securitisation Forum held in London today.
Opening the panel moderated by Jonathan Boyd, editor, Funds Europe, David Zackenfels, senior vice-president – legal, the Association of the Luxembourg Fund Industry (Alfi), said pensions are moving up the European policy agenda, particularly through the EU’s Savings and Investment Union and efforts to mobilise household savings. Europe, he said, needs to catch up with the US in turning savings into productive capital. The challenge is twofold: shifting household savings into long-term investment products, and ensuring pension schemes can access diversified, risk-adjusted returns. He also observed that European securitisation’s regulatory requirements make it tough for Ucits to be a diversifier. “Securitisation could be part of that bridge, but governance and transparency remain essential,” said Zackenfels.
Europe’s “productive capital gap” stems largely from underdeveloped funded pension systems, with capitalised regimes holding 2–3 times more risk capital per worker than PAYG systems, according to a study by Alfi and McGill University co-authored by Zackenfels. Workers in such systems hold around €209,000 in risky assets on average, versus roughly €66,000–€91,000 in countries like Germany and France, highlighting a shortfall in long-term investment capital . The gap is reinforced by lower allocations to risky assets and weaker household participation in capital markets, while greater exposure to risky assets through pension systems increases individual risk-taking and savings behaviour. Overall, Europe must better mobilise household and pension savings into long-term, productive investments to close this gap, he highlighted.
Tom Constance, securitisation partner at law firm A&O Shearman, said ratings are often integral to structuring, particularly in CLOs, while private markets increasingly use ratings to support financing, pricing and investor confidence. In areas such as asset-based lending, continuation funds and subscription lines, legal structuring must also address confidentiality and underlying deal-term constraints. “Rating is key part of structures such as CLOs,” said Constance.
Munawer Shafi, MD, multi-assets and head of structured and private debt, Aviva Investors, said securitisation is a tool to reshape the risk-return profile of assets to match investor requirements. He identified three main benefits: cheaper funding, capital efficiency and origination efficiency. By structuring assets into securitised vehicles, issuers can reduce risk to a level acceptable to funders, access more diverse capital sources and scale origination more effectively. “This can create a win-win situation across the capital stack, benefiting investors, issuers and the wider economy,” said Shafi.
Frank Benhamou, risk transfer portfolio manager, Cheyne Capital Management, highlighted securitisation’s flexibility, saying it enables investors to fine-tune exposures while also improving data quality and reporting across portfolios. However, he warned that transactions can be complex, time-consuming and costly, meaning the industry must work harder to streamline processes, particularly for smaller portfolios. “Market dynamics can influence the field too, as seen by growing investor interest in areas such as data-centre securitisations,” said Benhamou.
Ratings were a key theme of the discussion. Marc Pinto, MD, global head of private credit, Moody’s Investors Service, said rating agencies can help provide an independent view of risk. However, regulators are still grappling with the role of private ratings, while methodologies must become more agile as markets evolve. “Fund finance ratings are seeing increased activity, with new tools being introduced, particularly in private equity and private credit. Methods need to be agile, and the industry must interact more. It takes a village to create transparency,” said Pinto.
“Standardisation of ratings and the overall governance is key. We must demystify risks and address benefits through open discussions,” added Zackenfels.
For pension schemes, Shafi said securitisation offers not only yield but also diversification and duration management. “Investors are looking at private securitisation and asset-based finance. Non-bank platforms are also entering the space, thanks to the advent of AI,” he added.
Opportunities are significant, but growth will depend on better disclosure, stronger underwriting discipline, regulatory coordination and clearer governance, concluded the panellists.
