Abdallah Nauphal, chief investment officer at Insight Investment, said that investment assets should be benchmarked against the future liabilities faced by pension funds.
Nauphal laid out his vision for the future of investment management and Insight’s approach to liability driven investment (LDI) at Insight’s Investment Seminar 2004 for pension fund trustees and consultants.
“We live in an increasingly volatile world. Pension funds expect a broader range of financial solutions,” said Nauphal. “Insight sees benchmarking assets against the specific liabilities that pension funds are obliged to pay as the necessary way forward. This prioritizes the principal investment objective – the promises schemes make to their members – while retaining the ability to add value.”
Commenting on Insight’s response to the LDI challenge, Nauphal continued, “We are committed to our relationship with clients, to finding innovative solutions that solve their investment problems and LDI will be an important component of this.
“These strategies are not a fad – they prioritize the securing of the pension pledge and will be the cornerstone on which the future of asset management will be built,” Nauphal said.
Insight’s specialist financial solutions group is dedicated to the development and management of liability-driven investment mandates. The service is designed to take account of clients’ individual funding levels, capacity and willingness to take on risk, as well as their return objectives, a spokesman for Insight said.