Liability Driven Investment

Liability Driven Investment (LDI) is a popular and core risk management tool for pension schemes and insurance companies.

Liability Driven Investment (LDI) is a popular and core risk management tool for pension schemes and insurance companies. Over the last ten years it has proven to be a successful strategy for reducing risk and funding level volatility. The market has evolved over the years with BMO Global Asset Management, a leading LDI manager, remaining at the forefront of these developments. We are an innovative, award winning LDI manager with over 500 clients, offering the full range of liability management and balance sheet solutions.

Risk Disclaimer

The value of investments can go down as well as up as a result of market movements; changes in interest rates (and inflation expectations) and investors may get back less than the original amount invested. Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment. The use of gearing can enhance returns to investors in a rising market, but if the market falls the losses may be greater. 

BMO Low Dependency Solutions

Find out more about our accurate and tailored low dependency solutions, designed for maximum efficiency, minimum governance burden and with full ESG integration.

BMO Global Asset Management have established a strong reputation for innovation* and putting clients at the heart of its solutions.** This is supported by the fact we won more new mandates than any other LDI manager in 2017.***

*Ranked 1st for ‘innovation and product solutions’, Greenwich Associates 2016 UK Investment Consultant Survey.

**Ranked 1st for ‘meeting client objectives over past 2-3 years’, Greenwich Associates 2016 UK Institutional Investors Survey.

***45% of new LDI mandates implemented in the UK in 2017, XPS Investment annual survey 2018.

 

This video was produced before the fund renaming and may reference the old fund name(s)

“Liability Driven Investment (LDI) is about putting a scheme’s liabilities at the heart of its investment strategy, in order to minimise adverse movements in the funding ratio.”

Alex Soulsby, Head of Investment Solutions, EMEA

LDI in 2020

Jonathan Smith, Director, Client Portfolio Manager, looks at what lies ahead for the LDI market in 2020, including the ongoing reform of RPI, and how the evolution of end game strategies is going to shape the LDI manager of the future.

 

Leading innovation for over a decade.

2003

1st Pension scheme LDI hedge

2011

1st Dynamic LDI hedging strategy

2013

1st transition fund for LDI

2014

1st transition from LDI fund to buy-out provider

2016

1st Equity-linked Dynamic LDI fund

2003

1st Pension scheme LDI hedge

2011

1st Dynamic LDI hedging strategy

2013

1st transition fund for LDI

2014

1st transition from LDI fund to buy-out provider

2016

1st Equity-linked Dynamic LDI fund

Past performance is not a guide to future performance. 

LDI Solutions

We offer the full range of LDI strategies and place great emphasis on innovation, having been first to market with a significant number of hedging strategies. Our experienced team considers each client and their requirements individually and is able to design tailored hedging solutions with an emphasis on flexibility and effectiveness as well as striking the appropriate balance between accuracy, governance and cost.

  • Extensive range of pooled funds spanning traditional LDI, growth plus LDI, passive and dynamic investment strategies
  • Sterling and Euro LDI solutions
  • Full liability modelling and solution design capability
  • Bespoke fund and segregated portfolios
  • Derivative solutions expertise including equity and credit derivatives, options and FX hedging
  • Passive funds to provide a low cost, flexible approach to hedging a scheme’s liabilities
  • Full service portfolios to minimise client governance
 
 
 
 

LDI Insights

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Derivative market update

Client Portfolio Manager, Simon Bentley updates us on the latest developments in the derivative market.

A ‘complete’ low dependency hedge

Nicola Thorpe looks at the LDI and credit elements of low dependency solutions.

Q3 2020 LDI Survey

Our quarterly Survey polls investment bank trading desks on the volumes of quarterly hedging transactions.

Why cashflow matching?

Looking at low dependency and the benefits of cashflow matching strategies.

Q3 2020 Repo Update

This month we feature our quarterly repo update.

The Pensions Regulator: complying with the proposed new code of practice

TPR's revised DB funding code of practice and the routes trustees can take to comply.