An $18 Billion Finnish Bond Fund Tells Why It’s Fleeing the ECB

The man in charge of investing 16 billion euros ($18 billion) in bonds at Finland’s biggest private fund says he’s “reluctantly” being pushed out of the safest debt markets.

Wilhelm Backlund, who manages fixed income, currencies and commodities at Finland’s Varma Mutual Pension Insurance Co., which oversees a total of 42 billion euros across asset classes, is doing what he can to adapt to the fallout of the European Central Bank’s corporate bond purchase program, which started in June. Bank of America Merrill Lynch has already warned that the ECB’s disclosure that it holds more than two-thirds of eligible corporate debt in the euro zone may be the “catalyst” that pushes investors out of that debt class as they search for better liquidity and pricing.