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Article: Special Report: Investment Banking Series - Liability-driven investment - Banks come knocking on trustees' doors.
- Article from:
- Financial Times Mandate
- Article date:
- May 1, 2006
CopyrightCOPYRIGHT 2006 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Gerry O'Kane
We are all familiar with the painful predicament pension funds find themselves in. Haunted by underperforming assets, bleeding deficits and becoming ever-more wrapped in regulatory bandages, trustees and pension fund sponsors have become more adventurous in asset allocation and investment strategy.
In part that adventurous spirit has led many pension funds down the path to liability-driven investment (LDI), which seeks to match returns from portfolio assets with funding commitments. For trustees, however, this new strategy has brought unfamiliar instruments dominated by derivatives and investment banks to their door. While some ...