Liability Driven Investments
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Given the 20 year or longer liabilities of pension funds, Liability Driven Investments ( LDI ) are playing an increasing role with long term investors.
This article by Standard Life describes the drivers of LDI and links the time-span for planning to different investor group and sources of value creation.
Given the absolute pension liabilities and the 20 year + time span for planning, pension funds will continue to grow increasingly active in managing their investment if they are to meet their long term liabilities to pension beneficiaries.
The best way for indexed pension funds to increase their portfolio returns is to be active NOT passive owners and ensure Boards and CEOs are held accountable at the correct Level of Work and compensated accordingly.
This article by Standard Life describes the drivers of LDI and links the time-span for planning to different investor group and sources of value creation.
Given the absolute pension liabilities and the 20 year + time span for planning, pension funds will continue to grow increasingly active in managing their investment if they are to meet their long term liabilities to pension beneficiaries.
The best way for indexed pension funds to increase their portfolio returns is to be active NOT passive owners and ensure Boards and CEOs are held accountable at the correct Level of Work and compensated accordingly.