Meeting your pension promise: a pooled approach to lDI

The LDI Solutions Plus platform shares many of the characteristics that make Insight’s segregated LDI solutions attractive to investors: the platform provides the potential to achieve a precise liability match that actively tracks markets and a fund’s requirements, using an approach that achieves the best value, maximum flexibility and offers exceptional service.

Client benefits include:

• Use of a Low cost delivery mechanism – pooled funds are an efficient tool, which introduce significant cost savings relative to segregated LDI solutions. This is achieved through the simplicity of implementation, reduced legal requirements, and ease of ongoing administration and monitoring.
• Adoption of an Intelligent approach – Insight designs, implements and manages the hedge using proprietary processes and systems, to ensure we offer clients meaningful value enhancement. Our intelligent approach helps clients to actively reduce interest rate and inflation risk when market conditions are favourable, through carefully managed timing and selection of suitable hedging tools including bonds and derivatives.
• achieving a More precise liability match – the comprehensive range of sub-funds in the LDI Solutions Plus range can be combined to create highly tailored solutions that aim to precisely match each client’s unique liability characteristics.

LDI Solutions Plus uses a range of 39 sub-funds as flexible building blocks. Each fund offers targeted exposure to inflation and interest rate risk and Insight allocates a client’s assets across the range of funds, seeking to deliver their specific cash flow objectives.

The range includes five types of funds offering a range of exposures using both derivatives and bonds:

• Nominal Funds – used to match future cash flows that are fixed amounts.
• RPI-Linked Funds – used to match future cash flows that are inflation-linked (to Retail Price Inflation).
• LPI-Linked Funds – used to match future cash flows that are inflation-linked, with caps and floors.
• Inflation Focus Funds – used to provide only inflation exposure, enabling investors to manage interest rate and inflation risk separately.
• Gilts Funds – used to manage inflation and interest rate risk using gilts rather than swaps. 
   

The Funds are only partially funded, with the specific funding requirement tailored to each Fund. The performance of each of the Funds in the range is substantially ahead of its benchmark since inception*.

*Source: Insight Investment, as at 28 February 2011 and based on unit price performance, net of fees.  

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