The emergence of LDI-based funding strategies probably represents the most significant development in pension fund investment over the last 15 years. We are proud of the part we played in introducing clients to this approach: helping them navigate new challenges and implement more effective and resilient long-term funding strategies.

Market turmoil at the turn of the millennium resulted in widespread funding deficits and revealed the extent to which conventional strategies were ineffective in controlling funding level volatility. We were one of the pioneers of a new approach: making funding pension benefits the key objective, and then directly managing the risks associated with delivering that promise. 

Pension funds may decide to use LDI strategies to focus on solving different problems. For example, less mature pension funds may use LDI to help manage funding level volatility, while more mature funds may focus on increasing the certainty that they can afford to pay out pensions over time.

Insight’s market-leading capabilities in both LDI and fixed income¹ provide the ideal platform to work with clients to develop enhanced cashflow driven investment (CDI) strategies. We offer fully integrated solutions. These often combine liability hedging with liquidity management and access to potential returns through strategies including less liquid assets like secured finance. These solutions are highly tailored to meet client needs and offer enhanced economic efficiencies as well as governance and operational benefits.

In 2021, Insight was named LDI Manager of the Year at the Professional Pensions UK Pensions Awards, Financial News Asset Management Awards, and the Pensions Age Awards.