Capital owners were asked what they thought of LDI, and how their
individual plans are implementing (or not implementing) the strategy.
The results may surprise you.
While surveys of liability-driven investing (LDI) practices have been done
before, they have not always penetrated deeper than the quotidian
questions concerning where a plan sponsor lies in the spectrum of
de-risking solutions. However, thanks in large part to close collaboration
with multiple LDI providers, consultants, and chief investment officers, we
at aiCIO believe that this survey—the first edition of what we hope will
become an industry benchmark—reaches a level of detail that is rarely
achieved when surveying such a complex and essential topic. The results
confirmed some things we already knew—that corporate funds are
increasingly looking towards LDI as they search for ways to de-risk, while
public plans are not—and tell us a few things that we didn’t, namely that
regulatory considerations were much less important a driver of LDI
implementation than funded status and contribution volatility. Flip through
the following pages to find more such findings.
Like with our other Surveys of Asset and Geographical Allocation (SAGA)
Series editions—the most recent being our Risk Parity Edition and the
soon-to-be-released FX Edition—the LDI Edition will only become more
robust and meaningful as future repetitions are executed. Think of this version as a snapshot.
Next year, it will be a short film. Following that, a longer movie. So stay tuned—the best is
yet to come for the SAGA Series: LDI Edition.
Methodology
The aiCIO Survey of Geography and Asset Allocation Series: LDI Edition was conducted in September of this year and
asked respondents drawn from aiCIO’s readership to respond to questions regarding their pension fund’s status and future
plans. 127 responded from across the globe; in this edition, we relied only on responses from the United States that qualified
by meeting two criteria: they (a) were a senior investment official at (b) a corporate or public defined benefit pension plan.
For more information, contact Quinn Keeler (qkeeler@assetinternational.com).