All Liability-driven investment (LDI) articles – Page 7
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News
PPF reserves could be ‘wiped out’ by one or two big claims
Pension Protection Fund chief executive Oliver Morley has warned that the lifeboat’s reserves could be wiped out by just a few large claims, while downplaying the risk of a post-Covid run of small-scheme claims.
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News
RPI reform holds back schemes’ inflation hedging
On the go: Inflation hedging decreased by 13 per cent quarter-on-quarter in the third quarter of this year amid ongoing concerns about reform to the retail price index, according to the latest BMO Global Asset Management liability-driven investment survey.
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OpinionBuy-and-maintain credit poised to take centre stage
Data crunch: As the UK’s private defined benefit schemes mature and turn increasingly cash flow negative, their focus is shifting beyond funding ratio stability to adopting income-generating investments that help meet pension payments.
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OpinionHow should pension funds apply ESG to derivatives?
Despite the prominence of derivatives across UK pension scheme portfolios, the assessment of sustainability factors in derivatives remains relatively nascent, writes Cardano UK’s Kerrin Rosenberg.
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News
Market volatility leads to attractive returns in low-risk credit
On the go: Pension schemes should consider adopting high-quality, low-duration credit strategies such as asset-backed securities as an alternative to traditional bond allocations when looking to derisk their portfolios, according to a new report from Aon.
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OpinionHow fiduciary management performance should really be assessed
Trying to draw inferences about fiduciary managers by comparing their growth funds grossly misses the point – to outperform liabilities – of these mandates, argues IC Select’s Anne-Marie Gillon.
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News
Transparency initiative adds new tools following industry support
On the go: The Cost Transparency Initiative has released additional resources and a new set of tools aimed at encouraging more schemes and asset managers to sign up to the standard, following a strong show of support by the industry for the framework it published last year.
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News
Investment-grade back in favour with DB schemes
On the go: An illiquidity premium has appeared in long-dated investment grade bonds, according to consultancy Aon, which has urged clients to take advantage of coronavirus volatility to turbo-charge their matching allocations.
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OpinionDon’t panic over 2020 valuations
Not all schemes will come out of the Covid-19 crisis in a worse shape than they entered it. Wherever trustees sit in the spectrum, their first priority should be gathering information, writes Dalriada Trustee’s Charles Ward.
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News
Telent: Buy-in could have scuppered scheme rescue
On the go: The trustees behind the record-breaking £4.7bn buyout of the Telent pension scheme say purchasing partial buy-in contracts could have derailed their aim of securing all members’ benefits.
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News
Looming Brexit sees slowdown in LDI derisking trend
On the go: Interest rate and inflation hedging activity by UK pension schemes saw a dramatic slump in the second quarter of 2019, although experts said this was more likely due to Brexit "frontloading" than a sustained slowdown.
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News
BoE highlights systemic risk of funds’ use of leveraged loans
On the go: Pension fund liability-driven investing techniques are among the systemic risks to the UK’s financial system highlighted by the Bank of England in a new report.
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News
DB continues to mature as 73% cash flow negative
On the go: Almost three out of every four defined benefit schemes in the UK are now cash flow negative, according to consultancy Mercer’s 2019 asset allocation survey.
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Features
Anglo American dials down equities even further
The UK defined benefit schemes of mining multinational Anglo American have halved their already minimal exposure to equities, as the plans near self-sufficiency and reduced risk.
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OpinionWhat converging global monetary policy means for UK pension funds
Central banks’ dovish pivot should prompt pension schemes to review the scale of current risk exposures, says Cardano’s Paras Shah.
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OpinionWhy schemes cannot rely on credit strategies alone for CDI
Cash flow-driven investing is flavour of the month with managers and consultants, but River and Mercantile’s Mark Davies says a credit-reliant implementation of this strategy does not mitigate as much risk as trustees might assume.
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News
Fiduciary managers struggle in 2018’s testing markets
On the go: Fiduciary managers significantly undershot their targets in 2018, with underperformance ranging from 6 per cent to more than 11 per cent, according to the first XPS FM Watch report.
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Features
LDI growth continues across UK schemes
UK pension fund exposure to liability-driven investments continues to increase, according to data collected by Pensions Expert’s sister title MandateWire, as an increasing number of smaller schemes enter the market.
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OpinionRisk management should not just focus on assets
Data Crunch: Performance numbers alone do not give an accurate picture of the health of a scheme, as the impact of the Brexit vote shows. Broadridge’s Jonathan Libre demonstrates the value of integrated risk management.
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Features
UK schemes slash equities following long bull market
The global financial crisis gave rise to a record-long bull run, but in recent years many DB pension funds have been preparing for the inevitable end to these highs by reducing their reliance on equities.