THE GOOD, THE BAD AND THE UGLY: MUTUAL FUNDS AND PRIVATE PENSION FUNDS INDUSTRY, WHO GETS THE LION’S SHARE: GOVERNMENT, ASSET MANAGERS OR CLIENTS?

Abstract

The most important retail banks inBrazilhave created private pension funds’ structures to be offered to clients that normally are investors or potential investors of their mutual funds. Despite being a much more recent activity, the social penetration of private pension funds has increased faster than mutual funds. As there are some operational similarities between the mutual funds and private pension funds structures, it turns out important to understand if the recent lack of performance noticed in the Brazilian mutual funds will be replicated in the private pension funds. The question that arises is who will get the lion’s share in this segment of the financial market: clients, asset managers or the government. Finally, this article will explore an alternative solution: Electronic Platforms of Investment (EPIs). These financial institutions would foster the disintermediation between savings and investments through electronic channels; and as a consequence, they would increase the efficiency of funding productive investments through better remunerating Brazilian savings.