Expanded Liability Aware fund range now includes a series of pooled Buy & Maintain CDI and Credit funds and pooled Liability Driven Investment profile funds designed to address the preservation and income requirements of defined benefit pension schemes.
Aberdeen Standard Investments (ASI) has extended its range of Liability Aware pooled funds following the increased focus defined benefit (DB) pension schemes have on setting funding and investment strategies to meet long-term funding objectives.
The Buy & Maintain Credit fund range and the Liability Driven Investment (LDI) profile fund range will support pension schemes that have a growing need for generating income to meet benefit payments and refining hedging precision to reduce residual interest rate and inflation risks.
ASI is already leveraging its insurance company heritage and 25 years’ experience of managing insurance annuity mandates to deliver robust fixed income portfolios for larger DB pension schemes. The extended fund range has been developed for smaller to medium-sized pension schemes, where a pooled fund solution may be more suitable.
The funds will be managed by ASI’s Fixed Income team who manage assets of over £130 billion, as well as its experienced LDI team who service over £50 billion in Liability Aware mandates*.
Pension schemes will now be able to create a bespoke liability aware solution by combining funds from across the range. The LDI profile funds can be selected to tailor interest rate and inflation hedging, whilst the Buy & Maintain Credit funds offer a portfolio of high quality corporate bonds to meet income requirements through liability aware cashflow-driven investment (CDI) and credit funds across a wide range of maturities. The funds enhance ASI’s DB endgame solution offering and complete the pooled Liability Aware range, helping clients to meet their overall objective.
Mark Foster, Global Head of Pension Solutions, ASI, said:
“As pension schemes progress through their de-risking journey, the investment focus shifts towards minimising risk and increasing certainty of outcome. This shift takes a very specific skillset to manage and our insurance heritage, ESG approach and investment capabilities place us in good stead to ensure our clients’ investment solutions are aligned with their ultimate goal.”
Under the Liability Aware franchise, the new pooled solutions build on ASI’s Integrated Liability Plus Solutions (ILPS) fund range. ILPS was launched in 2016 to help DB schemes in the UK manage funding level volatility without compromising on the potential for growth through returns from investment assets.
*as at 31 December 2019
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Notes to editors
- The ASI Pension Solutions Team contains four LDI investment professionals with a combined background in actuarial and investment consulting. The team works with clients and their advisers to help them ensure the suitability of a particular liability aware mandate for an individual client solution.
- The Liability Aware team is responsible for the design, modelling, and management of more sophisticated investment portfolios and products, including the ILPS suite of funds. As well as on-going portfolio management responsibility for ASI's Liability Aware mandates (c. £50bn), the team provide investment optimisation capabilities to help solve asset allocation challenges faced by pension and insurance clients.
- Aberdeen Standard Investments is a global asset manager dedicated to creating long-term value for our clients. With over 1,000 investment professionals, we manage £486.5 billion* of assets worldwide. We have clients in c.80 countries supported by over 40 offices globally. This ensures we are close to our clients and the markets in which we invest. (*as of 30 December 2019)
- We are high-conviction, long-term investors who believe teamwork and collaboration are the key to delivering repeatable, superior investment performance.
- Standard Life Aberdeen plc is headquartered in Scotland. It has around 1.2 million shareholders and is listed on the London Stock Exchange.
- You can access the Aberdeen Standard Investments media centre here: https://www.aberdeenstandard.com/news-and-media
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