Agilis Winner

According to consultant Agilis, it is a team of disruptors who do not believe clients should accept the status quo, offering tailored strategies designed to thoughtfully meet clients’ investment and actuarial objectives.

Michael Clark, chief commercial officer at Agilis, says one of its innovations is the way it uses derivatives.

“A lot of the sophisticated firms in the LDI space use derivatives to aid in hedging interest rate risk. We take the approach of using equity derivatives to help plan sponsors achieve the level of expected return independently of the level of interest rate risk that they are hedging,” Clark says. “This approach allows plan sponsors to put together a risk-managed portfolio that reflects their risk tolerance and appetite to protect against interest rate risk while still maintaining the ability to have equity market exposure. In addition, with the equity derivative structures that we deploy, we can design them to provide a level of downside protection to further risk manage our client’s exposure.”

Another recent innovation from Agilis, according to Clark, is to execute hedge fund exposure using total return swaps.

“This can be useful as a way to access liquidity from an otherwise illiquid asset class, particularly for clients that are heavy on illiquids and are facing rebalancing challenges, given the significant market moves over the last 18 months,” he says.

Agilis has contributed to the institutional investing industry in the past 18 months by working with jumbo pension plan sponsors to help improve their portfolio efficiency. Clark says this was done by introducing leverage into portfolios to allow for additional risk management of current portfolio positions and allow for additional diversifying assets to help mitigate downside economic scenarios.

In addition, Agilis’ LDI/derivatives programs have been able to maintain or increase exposure to equity markets.

“Clients with a traditional glide path will have been ‘forced sellers’ of equities in 2022, as plan assets declined with rising interest rates and will have missed out on some of the equity market rebound that occurred in 2023 and 2024,” Clark explains. “Our clients, using equity derivatives, maintained exposures to equity markets throughout these periods and benefited maximally from the recent rebound.”

Agilis continues to promote the safe use of derivatives as an investment strategy that plan sponsors and CIOs should consider as part of their investment goals and objectives. According to Clark, “Derivative usage in many industries is an accepted norm as a risk management tool, and we continue to promote their usage in managing institutional asset pools.”

*Assets under management less than $1 trillion.

Finalists

• LGIM America
• NISA
• Principal Asset Management
• SLC Management