Core Capabilities: LDI | Insight Investment

Insight is the largest liability-driven investment (LDI) manager in the world¹. It manages $470.4bn in risk management solutions assets under management globally². Insight’s leadership in LDI is built from years of experience helping pension schemes to implement robust long-term funding strategies focused on their endgame objectives. We help our clients to evolve their approach in response to changing circumstances and market conditions.

Insight started offering liability driven investment in 2004. Today, it provides both tailored and pooled solutions to investors to address risks from interest rates, inflation and longevity.

One of Insight's specialities is integrated risk management where liabilities, investment returns and cashflow are managed by a single team. This is designed to increase investment efficiency, lower governance and offer greater resilience for pension schemes. It is designed to help pension schemes reach and maintain their funding objectives with greater certainty.

• Downside protection  Strategies can be constructed using derivatives to help protect against the impact of downturns in equity markets, while also maintaining some degree of exposure to upside movements.
• To release capital Derivatives require only a portion of total market exposure to be set aside initially, allowing you to gain desired exposures while leaving assets free for other purposes.
• Modify asset profiles efficiently Derivatives can help adjust assets on an ongoing basis to better reflect your liabilities more swiftly and cheaply than through trading physical assets.
• Manage overall exposure Derivatives can help target and modify total exposures across multiple portfolios – even if they are managed by different asset managers.

Interest rate risk, inflation risk and longevity risk are the key risks managed by liability driven investment. Changes in the magnitude of each risk can sharply raise the value of a pension fund's liabilities.

When managing inflation and interest rate risks, we seek to keep our hedges both efficient and cost-effective. We do this by continually evolving our process. We also take pride in our ability to protect clients in extreme market shocks.

Insight provides a platform through which small and large pension schemes can efficiently transfer longevity risk to the reinsurance market.

Integrated risk management is where a single team has oversight of a pension fund's liabilities, investment returns and cashflow. The objective of a single team having oversight is to increase investment efficiency, lower governance and offer greater resilience. This allows for more effective decision-making and implementation is enabled through clear delegation within set parameters. We believe one of the greatest strengths of this process  is the way it allows a pension fund to respond rapidly to unexpected shocks and so retain resilience. Insight has been using integrated risk management for its clients since 2019.