ADDED VALUE

BENCHMARK MANAGEMENT

 

We currently have over 1,600* clients for which we carry out a rebalancing role in respect of their scheme benchmark. Of these we have additional responsibility for the rebalancing of the Scheme's overall assets (i.e. including the assets managed by other managers) for over 100 clients.

We have set up a dedicated team for those clients with multi-asset indexed portfolios requiring periodic asset allocation monitoring/rebalancing. Specialist computer systems have been built to support this activity. Rebalancing is achieved efficiently and at low cost. In addition the substantial cash flows generated from over 3,113* clients can provide significant savings through crossing opportunities at the asset allocation level.

Our computer system enables the portfolio manager to monitor any client schemes asset distribution continuously, automatically adjusting the latest available prices/values in line with market movements. The client's benchmark is also displayed, together with the extent of any rebalancing required in order to return the schemes to a neutral position. A single keystroke is sufficient for the fund manager to confirm the computer's recommendation and for instructions to be issued to the relevant dealing areas. The system is highly flexible. It can accommodate both pooled and directly invested portfolios, together with assets being monitored which are under the control of other managers, and allows for the use of control ranges.

TRANSACTION MANAGEMENT

One of the major advantages that we have over our competitors is our expertise in minimising the costs of rebalancing portfolios. LGIM is one of the largest transition managers in the UK. We have carried out over 300 transfers in the last 12 months, involving assets over £50 billion and we were involved in several major transition management exercises. We have a highly experienced team who deal with the transition and portfolio adjustment for schemes.

CLIENT SERVICE

Defined Benefit Schemes

We appoint a dedicated Client Account Manager for each scheme to co-ordinate the reporting of our investment activities.

We also recognise that it is important to build strong relationships between our key investment specialists and the Trustees of our clients.

We like to meet with Trustees on a regular basis, to fit in with their specific requirements. We find that for index funds six monthly or yearly meetings are normally considered to be appropriate.

For our defined benefit funds, investment dealing dates are normally weekly - the first working day of each month and on Wednesday in each other week

 

Transaction Statements

Transaction statement is issued on each occasion money is invested together with a valuation statement which shows the value of the holdings in the fund. Valuation statements are automatically issued after the valuation on the first working day of each month, based on closing prices for the last working day of the previous month. Dividend income and any reclaimed tax are automatically reinvested and reflected in the unit prices. We have an automated email facility for clients who prefer electronic copies of the statements.

 

Quarterly Reports

We produce a tailored quarterly report which covers:

  • the objective or benchmark of the fund;
  • the value of the scheme's holdings and quarterly cash flow
  • changes in the value and distribution of the assets
  • transaction costs
  • performance returns, tracking graphs and fund activity
  • details of how we have voted on recent corporate actions
  • background to what has been happening in the markets
  • details about Level 2 disclosures

Internet

LGIM is committed to providing excellent client service and has had an on-line client website since 2001. In 2004 the "Clientsite" was redesigned and enhanced as part of a wider development, which enables trustees, their pension scheme managers, and administrators to access scheme information on-line. The scheme information is also accessible to consultants if prior permission is obtained from the trustees of the scheme.

The Trustee information on the site is divided into scheme information and fund information. The scheme section provides access to scheme valuations, transaction activity, invoices, scheme performance and asset distribution. We are able to show information about different schemes operated within one Trust Deed on the same site. The fund section includes price, performance, fund objectives and fund activity information for all funds in which the scheme invests.
 

Brochures

A monthly publication called "Fundamentals" is available to all Trustees and covers investment issues and market news. Downloadable copies of Fundamentals are available in the Key Information section of this site.

Education

As part of our client service programme we run Trustee Education seminars for our clients to help trustees develop their investment knowledge. In 2007 we successfully completed over 20 seminars throughout the country. If you would like further information about our Trustee Education programme please click here. We also publish Communique a newsletter for our occupational pension fund clients. To view our latest publications please click here.

 

*Source: LGIM 31 March 2010