IMN: Indemnification to 鈥榗hange鈥�
18 September 2014 London
Image: Shutterstock
The increasing cost of indemnification will see agent lenders offering a two-tier pricing structure in the future, heard attendees of the European Beneficial Owners鈥� 麻豆传媒 Lending Conference in London.
James Day of BNY Mellon said the increasing cost of indemnification will mean that agent lenders will have to offer fee splits with and without an indemnity, to give beneficial owners a choice.
Roelof van der Struik of PGGM Investments said that in the event that indemnification was not offered, it would be a case of measuring the increased risk against what is acceptable.
鈥淲e are not against risk鈥攚e just want to be rewarded for it,鈥� he explained, adding that if indemnification is removed and risk increases, beneficial owners would want greater returns as justification.
Van der Struik went on to praise indemnification, saying that it gives agent lenders a stake in trades.
He added that an indemnity also puts a lot of pressure on the beneficial owner, because it has to be confident in the agent lender鈥檚 ability to complete a trade.
James Day of BNY Mellon said the increasing cost of indemnification will mean that agent lenders will have to offer fee splits with and without an indemnity, to give beneficial owners a choice.
Roelof van der Struik of PGGM Investments said that in the event that indemnification was not offered, it would be a case of measuring the increased risk against what is acceptable.
鈥淲e are not against risk鈥攚e just want to be rewarded for it,鈥� he explained, adding that if indemnification is removed and risk increases, beneficial owners would want greater returns as justification.
Van der Struik went on to praise indemnification, saying that it gives agent lenders a stake in trades.
He added that an indemnity also puts a lot of pressure on the beneficial owner, because it has to be confident in the agent lender鈥檚 ability to complete a trade.
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