With the initial chaos of the COVID-19 market dislocation behind us but uncertainty still ahead, now is the time to refocus and potentially recalibrate core tenets of pension plan management. In this video series, we share our recommendations on how to address these challenges.
We build custom portfolios that help to achieve the outcomes and create the value each plan sponsor or pension scheme needs.
With more than 40 years’ experience in managing pension portfolios, we understand the complex challenges our clients face. Applying this knowledge on their behalf, we focus on achieving optimal results for each valuable unit of risk and capital.
Our client teams are led by senior investors and backed by experienced investment professionals. Together, each team partners with its client to help create a portfolio and relationship tailored to that pension’s current circumstances and long-term goals.
Our global footprint helps us to uncover areas of significant investment potential while our scale allows us to negotiate competitive terms for the benefit of our clients. This breadth of experience and resources allows us to construct truly differentiated portfolios designed to help our clients reach their targets while reducing downside risk.
We strive to align ourselves with our clients and don’t derive revenue from managers or other business agendas that might compete with you for our best ideas.
We serve diverse organizations and plan types, including:
- Government & Public Institutions
- Insurance Firms
- Multiemployer & Unions
- Not-for-Profit Organizations
- Defined Benefit Plans
- Defined Contribution Plans
- Cash Balance Plans
- Multi-Pool & Hybrid Plans
- Specialized Trusts
- Other Complex Asset & Liability Pools
For many US pension plan sponsors, the déjà vu of falling discount rates and volatile equity markets again raises the question of how best to hedge pension liabilities, if at all. The issue of liability hedging is especially pertinent in today’s complex and asymmetrical interest rate environment.
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As pressures on pensions mount, we believe financial executives are best served by re-evaluating major decisions in terms of the true tools at their disposal. In this paper we review four levers that are fundamental drivers of pension costs and outcomes: asset returns, liability hedging, contribution policy, and benefit management. Balancing these levers is critical to enabling greater probability of success in managing pension risk, and we introduce a framework for chief financial officers and other financial executives to use in doing so.
As the COVID-19 outbreak has escalated in the United States, sponsors of single employer–defined benefit pension plans have experienced a roller coaster ride. Avoiding, or at least cushioning, another wild ride requires a well-designed hedging strategy that accounts for credit spreads. We provide context for this rapidly evolving spread environment and potential responses.
The construction and calibration of a liability hedging portfolio is integral to effective pension portfolio risk management, and this report delineates key considerations and best practices for the liability hedge allocation.