LIABILITY DRIVEN INVESTMENT
LDI Background
The market for Liability Driven Investment solutions has evolved substantially over the last couple of years. At LGIM we foresee the market for LDI becoming more commoditised in a similar way that index-tracking did in the early 1980s. Our ability to deliver cost effective and scalable client focused solutions has meant that we are now able to offer 66 building blocks to allow clients in building a stronger defence against future changes in interest rates and inflation.
The Benefit of Pooled Funds
Pooled funds are an efficient tool for the implementation of a Liability Driven Investment solution. For this reason and following feedback from our clients we have recently extended our range of pooled funds to include Cashflow Matching Funds. The principal benefits of implementing a LDI solution via a pooled route are as follows:
- Simplicity of implementation
- Ease of ongoing administration and monitoring
- Reduced legal costs
- Anonymity
All of the above means that a LDI solution can be implemented irrespective of the size of a Scheme’s governance budget.
