LDI Management

LDI Program

We create and implement sophisticated LDI programs that are both transparent and rigorous, using the most appropriate experts for each step in the process:

Actuarial Liability – we work in partnership with the scheme actuary to value the scheme liabilities
Investment Risk Model – we create a liability model and work with the scheme actuary to ensure close alignment with scheme liabilities
LDI strategy – we specify a practical, achievable mix of hedge components that match the true interest rate and inflation risk profile of the liabilities
Delegate mandates – we provide investment managers who are part of the LDI solution with clear mandates against market-driven benchmarks
LDI overlays – for a more precise implementation we can also use derivative overlays to fine-tune the accuracy of the hedge of the liabilities

Ongoing Portfolio Management

Our LDI solutions consist of internal management and third-party manager collaboration. We systematically monitor the funded status, hedge ratios, duration, key rate durations and tracking error of the total LDI program relative to the liabilities on a daily basis.

In reporting, we seek to attribute changes in the LDI strategy against changes in the Actuarial Liability. Clients can hold us accountable for the performance of the LDI strategy against their official liability calculation, avoiding confusion around model differences and misunderstood active positions.

As liability cashflow projections are updated for new data and assumptions, we work with our clients and their advisors to recalibrate the LDI strategy.

Why SECOR?

Track record – at SECOR we have been providing LDI services to our clients since 2011 and the team has experience going back almost 20 years
Broad experience – currently managing customized LDI solutions for large corporate pensions funds in the United States and across Europe
Derivatives specialists – enables us to efficiently implement LDI overlays in-house, using a diverse set of instruments
Active management – we can target excess returns with third-party fixed income managers while maintaining a consistent liability hedge

Certain information contained herein may be projected/forward-looking. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.