All Liability-driven investment (LDI) articles – Page 11
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News
Hedged Aviva schemes survive rate cut
Pension schemes sponsored by insurance giant Aviva have reported a marked increase in their accounting surplus owing principally to falling interest rates, but experts warn of further pain for schemes which are not hedged against interest rate risk.
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FeaturesRSA scheme targets buy-and-maintain strategy to derisk
The RSA Insurance Group’s Sal Pension Fund is focusing on buy-and-maintain credit as part of an investment strategy overhaul as the scheme looks to further derisk its portfolio following the results of its latest actuarial valuation.
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News
Experts eye hedging and CPI as UK DB deficit up £170bn in weeks
UK defined benefit pension deficits grew by £170bn over seven weeks in the run-up to the EU referendum, jumping to £900bn as market volatility following the result put further strain on funding positions.
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Features
Carclo deficit highlights pitfalls of equity exposure
Technical plastics manufacturer Carclo is adding liability-driven investment mandates and continued support for diversified growth funds to its defined benefit scheme portfolio, after poor equity market performance saw its deficit almost double.
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NewsSmaller schemes dive into LDI pools
Smaller schemes are increasingly using liability-driven investment strategies, as the number of pooled mandates powers growth in the market, research this week from consultancy KPMG has shown.
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News
LDI crucial part of portfolio despite low yields, experts say
Schemes must not leave themselves vulnerable to interest rate risk by ignoring seemingly expensive liability-driven investment strategies, according to panellists at a Pensions Expert event on LDI held last week.
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News
Active debt management key to exploiting bond opportunities
Schemes hunting for cash flow in a record-low gilt yield environment are turning to corporate bonds, emerging markets and active management of their debt portfolios, a study has revealed.
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FeaturesJaguar Land Rover revs up global credit
Jaguar Land Rover has decided to alter the strategic asset allocation in its two pension schemes by boosting its exposure to global credit, while decreasing assets held for the purposes of matching changes in the fund’s liabilities.
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News
Aberdeen transport fund swaps derisking provider in self-sufficiency push
The Aberdeen Council Transport Fund is rushing to replace a derisking solution as it seeks to update its investment strategy and target self-sufficiency.
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OpinionLDI: Cost concerns, cash flow and skewed models
Roundtable: Six industry experts discuss liability-driven investments - the costs, cash flow impact, European legislation and pitfalls of modelling.
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NewsShipbuilding scheme docks £220m into LDI
The Shipbuilding Industries Pension Scheme has committed £220m to a liability-driven investment mandate run by Legal & General Investment Management, as it seeks to derisk and hedge against interest rate rises.
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Features
Are LDI models less perfect than they seem?
Roundtable: Using models can make liability-driven investment seem like a clear-cut decision, but should trustees be more willing to question these models? In the final part of this roundtable series, Bestrustees’ Huw Evans, HR Trustees’ Giles Payne, Aviva Investors’ Rakesh Girdharlal, KPMG’s Simeon Willis, Cambridge Associates’ Benoît Jacquemont and P-Solve Asset Solutions’ Barbara Saunders discuss the pros and cons of LDI models.
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Opinion
How will Emir shape the way schemes use LDI?
Roundtable: Pension schemes have been granted a transitional exemption from having to centrally clear derivatives – a rule contained in the European Market Infrastructure Regulation – but the exemption will end in August 2017. How will schemes be affected and how are they preparing? In the third part of this roundtable series, Bestrustees’ Huw Evans, HR Trustees’ Giles Payne, Aviva Investors’ Rakesh Girdharlal, KPMG’s Simeon Willis, Cambridge Associates’ Benoît Jacquemont and P-Solve Asset Solutions’ Barbara Saunders discuss what the new requirement will mean for schemes.
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Opinion
What about cash flow: Balancing LDI and growth assets
Roundtable: Liability-driven investment can tie up a lot of cash. In the second part of this roundtable series, Bestrustees’ Huw Evans, HR Trustees’ Giles Payne, Aviva Investors’ Rakesh Girdharlal, KPMG’s Simeon Willis, Cambridge Associates’ Benoît Jacquemont and P-Solve Asset Solutions’ Barbara Saunders discuss if there is still room for schemes to absorb illiquidity.
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Opinion
Has LDI become too expensive?
Roundtable: Derisking in an environment of low interest rates makes liability-driven investment look expensive, but is it? In the first part of this roundtable series, Bestrustees’ Huw Evans, HR Trustees’ Giles Payne, Aviva Investors’ Rakesh Girdharlal, KPMG’s Simeon Willis, Cambridge Associates’ Benoît Jacquemont and P-Solve Asset Solutions’ Barbara Saunders discuss what makes the decision to hedge so difficult.
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Opinion
Corporate schemes shore up portfolios with fixed income and LDI allocations
Data analysis: UK corporate defined benefit schemes upped their allocations to fixed income in the last quarter of 2015, data show, as trustees took the opportunity to hedge out further risk by increasing liability-driven investments.
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NewsAsset derisking could leave a funding gap
UK defined benefit pension schemes have removed nearly half of their funding level risk over the past decade, but new research has questioned whether asset derisking has gone too far.
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Features
Market trends shaping liability management in 2016
Defined benefit pension schemes across the UK struggled with soaring liabilities in 2015, but industry experts have warned against a 2016 ‘bet on interest rates’ in what could be a bumper year for tackling risk.
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NewsLow for longer (but longing for higher) rates
Analysis: The US Federal Reserve’s decision on Wednesday to push rates up may mark the end of an era, but investment experts say UK pension funds should expect little more than a small amount of volatility as a result.
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FeaturesCash flow crisis: How to avoid becoming a forced seller
Sweeping closures of defined benefit schemes across the UK will limit the pain of future liabilities for sponsors, but have created a growing problem many pension funds have been slow to recognise: a cash flow crisis is on the horizon.