Wealth managers who are selling structured products to high net worth investors should take note. Fears are being expressed even by some maj...

Wealth managers who are selling structured products to high net worth investors should take note. Fears are being expressed even by some major European institutional investor that structured products are far too complex and lack transparency.

Three major European pension funds are so concerned about the asset class that they have ruled out investing in them for the time being, according to Investment & Pensions Europe.

Speaking at IPE's annual awards ceremony in Berlin, Thomas Stoetzel, head of investments at Airbus Deutschland’s €600 million ($702 million) pension fund was quoted as saying: “My motto is always don't buy what you don't know. We recognise that there is a possibility for higher returns for say CDO (credit debt obligations), but right now we regard them as too complex, like a black box.”

Representatives from the pension funds for the European Patent Organisation and Denmark's ATP also said they would not invest in structured products.

The European market for structured products was “still very young” and this is a hindrance according to Mr Stoetzel.

Other institutional investors at the ceremony were reported as saying that investing in structured products from a risk perspective was “a nightmare”.

A representative of the €45 billion Danish scheme ATP, said that investing in structured products was impossible at the moment because ATP simply did not understand them.