European regulators must revive the asset-backed securities (ABS) market and unlock pools of pension capital to kickstart real estate liquidity and fund critical regional infrastructure, according to Zurich Insurance Group’s CIO.
Speaking at ULI Europe Conference 2026 in Berlin this week, Stephan van Vliet said that structural financing roadblocks and an overreliance on traditional bank lending were hindering transactions across the continent.
While liquidity is beginning to return to pockets of the market in the US and Asia, Europe remains constrained by a regulatory framework left over from the global financial crisis, he said.
According to van Vliet, transacting large properties has become exceptionally difficult because the necessary financing structures are missing, and he urged European regulators to look beyond banks and encourage asset managers to play a more active role in real estate finance.
An essential move in unblocking the capital pipeline involves a complete reassessment of the European ABS framework. Following the financial crisis, regulators imposed heavy capital charges on insurance companies and pension funds investing in these instruments, a move the Swiss insurer’s CIO believes went too far.
“I think, with hindsight, that was a mistake, because we threw the baby away with the bathwater,” van Vliet said. “We need that market to then originate and distribute investments in real estate finance. And all of that together would then help.”
European property values
Deals are also stalling because European property values are dropping much more slowly than those in north America, van Vliet said.
While liquidity is resuming in the US, it is being driven by a greater willingness among market participants to accept write-downs and clear the books, he added, citing Blackstone’s recent decision to mark down a major asset in Seattle by around 40% as a prime example.
“Americans are more willing to cut their losses and move on,” he said. “I think that also needs to happen in certain cases in Europe.”
According to reports this week, Blackstone is selling the 44-storey US Bank Center in downtown Seattle to Spear Street Capital for approximately $280m (€240m), representing an even sharper discount of less than half of the $612m the private equity giant paid to acquire the asset in 2019.
Massive opportunity for economic growth
Van Vliet also said fixing how Europe invests its savings could create a massive opportunity for economic growth. He pointed out that significant pools of pension assets across Europe remain completely “underutilised and underdeveloped”.
If policymakers can implement the right incentives to expand these pension systems, they could match the scale seen in countries such as Switzerland or the Netherlands, where pension funds hold assets equivalent to 150-200% of national GDP.
Unlocking these domestic savings pools would provide the scale of capital required to support European competitiveness on a global stage. “If we could develop these more, this would be the pool of savings that could fund European defence [and] European AI data centres; things that are critical for the development of Europe,” van Vliet added.
Even though deals are currently hard to execute, institutional investors still want real assets, provided the underlying portfolios are modernised.
Zurich Insurance Group, which manages a $14bn real estate portfolio, continues to favour the stable income profile of core real estate, which helps keep the wider portfolio running like “Swiss clockwork”, he said.
Looking ahead, van Vliet expressed optimism that the market was beginning to stabilise, paving the way for an increased institutional presence once structural reforms are achieved. He said Zurich Insurance wanted “to be part of that journey” of “repositioning portfolios for the societies of the future”.
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