Understanding these risks and ensuring they are proportionate to the rewards expected, and other sources of risk and expected return, is essential to successfully achieving your funding objectives.
Our experience in integrated risk management for pension schemes, insurance companies, banks and asset managers means we can help you design and put in place the right risk management solution for your scheme.
There isn’t one right approach to either the level of protection that should be put in place, or the structure of the solution that should be adopted. It’s important that your risk management arrangements (usually referred to as LDI) are designed to fit with your wider objectives and the rest of the portfolio.
For some, a more straightforward buy and hold pooled fund solution will be appropriate; for others, a more actively managed dynamic approach will be better. We’ve implemented the full range of solutions with our clients, so you can be sure that technical complexity won’t get in the way of us doing the right thing for your scheme – we’ve got the knowledge and experience to help you develop the right solution.
Putting in place a level of protection (liability hedging) that’s right for your scheme.
We’ve extensive experience of implementing risk management solutions, always driven by each scheme’s particular needs.
Our analysis, and past experience, showed that interest rate and inflation risks were disproportionate when considered in the context of the rest of the portfolio. We designed a solution which rebalanced the scheme’s risk exposure away from these risks towards other risks which the trustees agreed were more likely to be rewarded.
The result is a more stable funding position, but with a similar overall expected return.
Partner and Senior Investment Consultant