Through an information gathering process involving historical and current plan characteristics we better understand client goals and risk budget. This assessment of plan liabilities assists in quantifying client risks and objectives and the creation of a customized investment policy statement.
A customized client solution begins with stochastic asset liability modelling to identify potential asset allocation strategies that seek to optimize risk-adjusted returns by:
Customize Liability Benchmark hedges client-specific interest rate risk and a customized glide path incorporates current and long-term pension risk objectives. A glide path provides a systematic approach to de-risking that is dynamically triggered by changes in funded status. Efficient cash-overlay strategies may also be developed.
Driven by the plan sponsor's adoption of a new investment policy statement, portfolio construction utilizes proprietary research and outside analytics to apply quantitative and fundamental approaches to relative value. Fundamentals, valuation and market technical are key factors in determining sector weights and duration/curve exposure.
We partner with our clients to pursue client objectives through ongoing monitoring of funded levels versus goals and glide path. Funded status and investment performance reconciliation are customized to client needs. An annual review process re-optimizes a portfolio through ongoing discovery, design and implementation.
For more information on our LDI capabilities, please contact the LDI teamEmail