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ALFI swing pricing survey - update 2015

- Studies

The trend towards greater adoption of swing pricing continues. The third edition of ALFI’s Swing Pricing 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 as well as an additional tool to help funds manage liquidity risks. This technique is therefore perfectly in line with ALFI’s main objectives to protect investors and to foster dedication to professional standards, integrity and quality.

The 2015 version of the ALFI Swing Pricing Survey increases the scope and depth of the previous survey done in 2011 and provides more detailed insights into how swing pricing is currently applied by asset managers, common trends, emerging themes and the challenges the industry faces in this regard.

The survey was conducted by a dedicated ALFI working group throughout July to September 2015 and targeted the largest 65 Luxembourg asset managers. 45 companies participated to the survey. They represent approximately USD 2,500 bn of assets under management, which is 69% of the assets of the Luxembourg domiciled funds (July 2015 figures).

Exactly two out of three respondents, who manage a combined USD 1,900 bn of net assets (54% of total assets under management in Luxembourg funds) apply swing pricing. More than 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. These managers might benefit from the updated Swing Pricing Guidelines ALFI has published alongside with the survey.

The 2015 ALFI Swing Pricing Survey is available in a PDF format on this link.

Updated on 18/12/15
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