In the latest issue of Pensions World, Moorgate client PensionsFirst Capital’s CEO Hugo James discusses how pension funds can overcome the barriers to implementing dynamic liability-driven investment (LDI) strategies, in order to match liabilities with the stable inflation-linked cashflows generated by long-dated assets. Taking this approach also offers pension funds highly marketable assets for a future endgame buyout.
Long-dated assets, such as infrastructure or solar, can provide better yields than other liability-matching investments, such as gilts, whilst also offering further portfolio diversification benefits. Furthermore, these assets are also a potentially more cost-effective and less risky way for funds to extend duration when compared to using swaps or other OTC products.
To read a pdf of Hugo’s full article in Pensions World, please click here