Liability driven investment (LDI)

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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 2018 we were awarded CDI Manager of the Year by Professional Pensions UK Pensions Awards.

Our approaches

Segregated LDI solutions

A segregated approach to LDI may suit pension schemes looking for a flexible, capital-efficient solution that adapts to market changes. Our partnership approach allows us to build close relationships with both our clients and their advisers, helping them design and implement highly effective solutions that evolve through time, reflecting market conditions as well as their changing requirements.

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Pooled LDI solutions

Our LDI pooled fund range can provide the building blocks to construct a strategy tailored to your scheme's unique needs.

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Self-managed buy-in

Evolving your de-risking strategy to include longevity hedges and transitioning to assets that are more cashflow aware can help you to reach your endgame with more certainty.

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Cashflow driven investment

Cashflow driven investment (CDI) is an approach that seeks to invest in assets that generate predictable cashflows and helps increase the certainty of meeting a scheme’s cashflow requirements and funding objectives.

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Please refer to the underlying fund or strategy page for details of the specific risks associated with investment.

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