Important information

FOR PROFESSIONAL CLIENTS ONLY.

This section of the website is for the use of Professional Clients resident in Ireland, and is not suitable for, or to be relied upon by, other investors. If you are not a Professional Client resident in Ireland, please leave this section of the website and enter a different section of the website which is appropriate to you, via the homepage.

Please read the following important information regarding the use of this section of the website. This Important Information should be read alongside, and is in addition to, the Legal Terms and Conditions (accessible by clicking on the 'Terms and Privacy' link at the bottom of each page of the website).

You can progress to your chosen area of this website by accepting this disclaimer. By clicking 'Accept' you confirm that you have read and accepted this Important Information for use of this section of the website and the Legal Terms and Conditions in their entirety (each as amended from time to time). If you do not agree to this Important Information or the Legal Terms and Conditions you must not use this section of the website.

This section of the website contains information on funds and services that may be sold, offered or delivered in Ireland. The information in this section of the website does not constitute either an offer to sell, a solicitation, or an offer to buy in a country in which this type of offer or solicitation is unlawful, or in which a person making such an offer or solicitation does not hold the necessary authorisation to do so. It is also not directed at investors, in those cases where the law prohibits this type of offer or solicitation from being made. Any applications or requests for further information received from persons not resident in a jurisdiction where the fund for which they are applying (or in respect of which they are seeking information) is registered, may be refused at Insight's discretion.

Information on the pages in this section of the website may not be suitable for all investors. Part of this section of the website contains products that are suitable for professional and institutional investors only. It is important that you do not rely upon the content of this website for investment decisions. Please contact a financial adviser before making any investment or financial decisions.

Important Disclosures

Opinions expressed whether in general, on the performance of individual funds, or in a wider economic context, represent the views of the contributor at the time of preparation. They are subject to change and should not be interpreted as investment advice, which Insight Investment is not authorised to give.

Past performance is not a guide to future performance. The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Investment involves risk, including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved.

If you are in doubt about the suitability of an investment, please contact your financial adviser.

Regulatory Information and Registered Offices

Insight Investment Management (Global) Limited is authorised and regulated by the Financial Conduct Authority (no. 119308). Registered in England and Wales. Registered number: 00827982. Registered office: 160 Queen Victoria Street London EC4V 4LA. VAT number GB 577 7181 95.

Insight Investment Funds Management Limited is authorised and regulated by the Financial Conduct Authority (no. 122259). Registered in England and Wales. Registered number: 01835691. Registered office: 160 Queen Victoria Street London EC4V 4LA. VAT number GB 577 7181 95.

Insight Investment International Limited is authorised and regulated by the Financial Conduct Authority (no. 416024). Registered in England and Wales. Registered number: 03169281. Registered office: 160 Queen Victoria Street London EC4V 4LA. VAT number GB 577 7181 95.

Insight Investment Management (Europe) Limited is authorised and regulated by the Central Bank of Ireland. (Ref. No. C154503). Registered in Ireland. Registered number 581405. Registered office: Riverside Two, 43-49 Sir John Rogerson’s Quay, Dublin, D02 KV60.

Insight Investment is the corporate brand for the companies managed or administered by Insight Investment Management Limited. Insight Investment includes Insight Investment Management (Global) Limited (IIMG) and Insight Investment International Limited (IIIL), each of which provides asset management services. These companies may be referred to as ‘Insight’ or ‘Insight Investment’. In the United Kingdom the business of Insight is conducted by IIMG, Insight Investment Funds Management Limited and IIIL, which are registered in England (Nos. 00827982, 01835691 and 03169281 respectively). These companies’ registered office is 160 Queen Victoria Street, London, EC4V 4LA. These companies are authorised and regulated by the Financial Conduct Authority. In certain European countries the services of Insight are offered by Insight Investment Management (Europe) Limited which is registered in Ireland (No. 581405) and regulated by the Central Bank of Ireland under CBI reference number C154503. In the United States the services of Insight are offered by IIIL and Insight North America LLC (INA), under the brand name Insight Investment. In Australia the business of Insight is conducted by Insight Investment Australia Pty Ltd., which is regulated by the Australian Securities and Investments Commission (Licence No. 230541), and registered in Australia (ABN 69 076 812 381). Services in Australia are also carried out by IIIL and IIMGL, and each is exempt from the requirement to hold an Australian Financial Services licence in respect of the financial services it provides to wholesale investors in Australia and is authorised and regulated by the (UK) Financial Conduct Authority under UK laws, which differ from Australian laws. In Canada the services of Insight are offered by IIIL and IIMG. In Japan the services of Insight are offered by IIIL.

The Insight Investment group of companies are wholly owned subsidiaries of The Bank of New York Mellon Corporation. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally. Products and services may be provided under various brand names and in various countries by subsidiaries, affiliates and joint ventures of The Bank of New York Mellon Corporation where authorized and regulated as required within each jurisdiction. Unless you are notified to the contrary, the products and services mentioned are not insured by the FDIC (or by any governmental entity) and are not guaranteed by or obligations of The Bank of New York Mellon Corporation or any of its affiliates. The Bank of New York Corporation assumes no responsibility for the accuracy or completeness of the above data and disclaims all expressed or implied warranties in connection therewith.

Cashflow driven investment (CDI)

Contact Us

Call our team on +44 20 7321 1547

or email Republic of Ireland enquiries

Please read important information about Insight's data collection policies HERE before sharing your personal information with us on email.

As pension schemes shift their focus from accumulation and funding to decumulation and dealing with net cash outflows, there is less time and less latitude to make up any funding shortfalls.

Schemes can help to maximise the certainty of meeting their liability cashflows by focusing on investments with a low chance of default and holding them to maturity.

The changing focus of pension schemes

Source: Insight Investment.

Cashflow driven investment (CDI) is an approach which has a focus on building portfolios of assets that generate predictable cashflows to help increase the certainty of meeting a scheme’s cashflow requirements and funding objectives.

Broadly speaking, the three motivations behind a CDI approach are:

Generate cashflows required to pay benefits
Secure returns with greater certainty
Reduce funding level volatility

Issues to consider

While such an approach sounds relatively straightforward, whatever route you take, there are new investment issues that you need to consider when investing in this new phase of your scheme’s lifecycle. These include:

What are the options to ensure sufficient diversification in your portfolio?
How can you retain flexibility, to enable you to capture new investment opportunities or respond to unplanned outflows, while still ensuring this does not give rise to the risk of forced sales to meet cashflow requirements?
How can you minimise the impact of credit defaults, reinvestment at poor returns and prematurity forced selling at poor prices?
How do you measure success?

Key success factors for CDI?

Based on our experience of creating bespoke liability-matching solutions and hold-to-maturity credit strategies to meet our client needs, we can work with you and your advisers to structure a CDI strategy to meet your specific needs.

Here are some areas that we would focus on to help you build and manage a successful CDI strategy:

Access to a wide fixed income investment opportunity set¹. We believe investors should start with the widest investment universe, including high-quality globally diversified fixed and floating rate income-bearing assets in both public and private markets. Such an approach would allow your scheme to secure the investment opportunities likely to provide the most attractive returns for a given level of risk
Balancing flexibility and cashflow-matching precision. This approach will provide you with the flexibility to target the maturity profiles of issues with the most attractive potential returns whilst still retaining your ability to meet your cashflow obligations
Integrating and dynamically managing your CDI strategy alongside any liability-hedging portfolio. Utilising an existing readily accessible liquidity pool provides you with more flexibility to pursue a greater cashflow mismatch and can offer economies of scale. Therefore, creating a holistic cash and collateral management framework helps you more efficiently ensure that the right assets are available to provide the right level of liquidity, at the right time. This should reduce the risk that you become a forced seller in adverse market conditions and increase your potential returns
Providing access to rigorous portfolio construction and credit risk-management techniques. Strong credit risk analysis, with the aim of minimising the probability of defaults, is a fundamental requirement for any pension scheme considering a CDI strategy
Ability to provide input and reporting on CDI-based funding strategies. We can provide the information necessary for those clients that are looking to integrate their funding and their investments more closely

Why would you choose to partner with Insight?

Our market-leading investment platform has been customised to deliver sophisticated risk-managed solutions, such as liability-driven investment (LDI), and has been refined over more than 15 years²
Our fixed income capabilities and process is highly rated, with a strong track record of avoiding defaults²
We have expertise in dynamic cash and collateral management, and running CDI strategies which are integrated alongside a portfolio of liability hedging assets
We are a long-running, recognised investment leader in quality for LDI and Fixed Income²

Financial solutions in numbers

2004 Insight launched its financial solutions capability

€707.4^bn in assets managed by our fixed income and financial solutions groups

€124.60^bn assets managed for cashflow-aware clients

As at 31 March 2023. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients. Assets managed by our fixed income and financial solutions groups include clients who have liability driven investment, fixed income and cashflow-aware strategies.

Corporate profile

Insight Investment profile (EUR)

Other related strategies

¹Assets for which investors have a contractual claim.

²Over the last decade, Insight has been ranked in first place for Overall Quality in LDI for 11 years in a row and has ranked top decile every year since 2013 for Fixed Income Overall Quality with UK Investment Consultants, based on Greenwich Associates 2021 UK Investment Consultant Research.

Source: Greenwich Associates 2021 UK Investment Consultant Research. LDI results are based on interviews with 11 UK consultants evaluating LDI. Fixed income results are based on interviews with 11 UK consultants evaluating fixed income managers. Greenwich Quality Index Overall is a composite of Investment and Service scores.

Insight's assets under management reflects the AUM of Insight, the corporate brand for certain companies operated by Insight Investment Management Limited (IIML). Insight includes, amongst others, Insight Investment Management (Global) Limited (IIMG), Insight Investment International Limited (IIIL) and Insight North America LLC (INA), each of which provides asset management services. Insight's assets under management are represented by the value of cash securities and other economic exposure managed for clients.

Important information

The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.

Where the portfolio holds over 35% of its net asset value in securities of one governmental issuer, the value of the portfolio may be profoundly affected if one or more of these issuers fails to meet its obligations or suffers a ratings downgrade.

A credit default swap (CDS) provides a measure of protection against defaults of debt issuers but there is no assurance their use will be effective or will have the desired result.

The issuer of a debt security may not pay income or repay capital to the bondholder when due.

Derivatives may be used to generate returns as well as to reduce costs and/or the overall risk of the portfolio. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.

Investments in emerging markets can be less liquid and riskier than more developed markets and difficulties in accounting, dealing, settlement and custody may arise. Investments in bonds are affected by interest rates and inflation trends which may affect the value of the portfolio.

Where high yield instruments are held, their low credit rating indicates a greater risk of default, which would affect the value of the portfolio.

The investment manager may invest in instruments which can be difficult to sell when markets are stressed.

Where leverage is used as part of the management of the portfolio through the use of swaps and other derivative instruments, this can increase the overall volatility. While leverage presents opportunities for increasing total returns, it has the effect of potentially increasing losses as well. Any event that adversely affects the value of an investment would be magnified to the extent that leverage is employed by the portfolio. Any losses would therefore be greater than if leverage were not employed.